case study on ford

FORD MOTOR COMPANY CASE STUDY

Emrah Aydın

1.INTRODUCTION

Ford Motor Company was started by Henry Ford in 1903 and the company went public in 1956. It is one of the most rooted and long-established automotive companies. It may be said that it is the pioneer of innovations in many areas like the first modern auto assembly line. The company has 2 major businesses which are automotive and financial services. Ford is known with its strong brand recognition, strong financial and marketing network and its innovative products. Mustang, Escort, Model T, Taurus and Explorer and SUVs models of Ford’s were quite influential.

Ford was the most profitable automaker in 1998 and its stock price increased by 130 percent from 1996 to 1999. Then, Jacques Nasser had worked as CEO of the company during 1999–2001. He applied some beneficial strategies like; diversification strategy which bought Kwik-fit to implement this strategy. Also he applied some strategies which brought detrimental consequences to the company. There was the recall of vehicles because of a tire problem and that recall cost $3 billion to Ford. Moreover, there was also dividing between Jacques Nasser and Bill Ford. Then, Bill Ford became CEO in 2001.

This company, which has been operating for many years, has had its ups and downs. The company had a rough time in the early 2000s. This case study is about Ford Motor Company’s strategic analysis which covers the years 1999 and 2003.

2. STRATEGIC ANALYSIS

2.1.General Environment (PESTEL framework)

Ford Motor Company is one of the five big automakers in the world and ranked in the top twenty American-based companies overall based on its global revenues. As a recognized brand, Ford has its plants spread around the world which makes it bound for many factors — this makes PESTEL analysis a must to understand the company’s environment in comprehension and the change of leadership in the midst of Ford’s fall makes this even more important. Though the company is profoundly bounded by PESTEL factors, the company has no or little control over all despite its global size and influence in the automotive industry. This analysis aims to pinpoint and emphasize the potential impacts of political, economic, social, technological, environmental and legal factors affecting the company as a whole.

Political Factors Affecting Ford Motor Company

We should analyse political factors on both international and local levels for Ford Motor Company. The company has lots of plants and initiatives across the globe, thus it is exposed and bound to different political settings. For example, Ford has an added-value business operation for its distribution network in Great Britain, Kwik-Fit, which makes the company affected potentially by the trade agreements both between the US and the Europe, and European and Britain countries– and at large affecting the value chain of Ford Motor Company in European region. Any significant change in these regions could force the company to redesign the value chain and make necessary changes.

Also, the terrorist attacks on September 11 and ties with the Asian countries are counted as political factors for the company. On the local level, the policy interest rates and monetary policies of central banks should be monitored especially for developing countries because in these countries, economy and politics are closely tied. This affects the buying power of individuals in a country especially in times of an economic crisis caused by a pandemic.

As Japanese companies have a substantial market share in the U.S., any political incident or issue between Japan and the U.S. could affect both parts. The company should closely watch the developing relationships between these parties and also for critical countries where Japanese companies penetrate the automotive industry.

Economic Factors Affecting Ford Motor Company

Back then in the late 90s and early 2000s, the economy was soft and interest rates were increased, with the incidents in 2001 and the recession, sales started to decrease dramatically. This resulted in automotive companies to seek growth outside the country: European countries and other continents showed promise for ample growth in sales and market share. However, it proposes a challenge for the company to adjust the value offerings and the designs in line with European or other foreign consumers’ preferences. The company is a renowned brand that showed great resilience in coming out of crisis situations.

Incidents like September 11 cause consumers to buy less, consume less and save more. This resulted in increased price-competition and increased discount & incentive schemes in the automotive industry. The durable nature of cars causes consumers to wait for replacing their current vehicles and this is valid for the whole economy as well — the growth in economy slows and consumer spending decreases significantly.

Ford Motor Company should review business cycle stages in countries as well — this may show differences in different kinds of countries like underdeveloped and developing etc. Although counted as a political factor above, monetary policy of countries interchangeably has an economic impact on the company.

Inflation rates, interest rates, the income levels of household, labor costs, economic stage and growth rate of a country, the situation of financial markets should be observed as economic factors.

Social Factors Affecting Ford Motor Company

Consumers have a huge impact on companies and industries — and especially in the automotive industry we see a rising interest in technology solutions on vehicles, and the power of consumers is only increasing. This is of course bound to the economic and cultural level of consumers and markets as a whole, but the global trends should be observed for insights in varying countries.

Factors like September 11, also changes the social environment in the country — people tend to decrease socialization and leisure activities, limit their spending, and distrust the government and such bodies. This resulted in decreased demand for the industry — this could have been overcome with marketing communications that focus on solidarity and rebuilding trust and relationships with consumers.

Other social factors include class structure, population growth and demographics, family size and structures, lifestyle trends and shared values. The social analysis of the consumer base is crucial for companies like Ford Motor Company, because the automotive industry codes the cars according to the family size and structure, the lifestyle of the family or the individual, the demographics of the target audience and especially the socioeconomic class that they belong to. The company should review social factors imperatively — because cars introduced to the market are positioned accordingly. Demographics, culture and education level of consumers also play a role in the cars introduced and also in the communication choices of the company.

Technological Factors Affecting Ford Motor Company

Today, the technological capabilities and advancement of vehicles play a key role in consumers’ preferences. Although the company introduces the same model of a car with different qualities and technological packages, the consumers’ technology-savviness should be observed. The company is proven to be a leader in the technological capabilities and improvement in the field but with the economic and social factors in mind, the knowledge and capabilities of consumers affect the vehicles’ packages in the particular market.

Ford Motor Company, however, was challenged by the Japanese brands as they had superior design and quality in their vehicles and Ford was lagging behind. Other vehicle brands exploited several segments in the market and they designed accordingly, while Ford failed to do so. Ford’s key focus was to broaden and ease the financing options for consumers rather than serving better models and quality with technological aspects.

Other car makers were exploiting newer hybrid technologies to produce more environment-friendly cars for example. The company, should it want to retain the market share and leadership, must closely watch technological changes and fast-changing consumer preferences. The company could produce pilot units and test the units to introduce the new cars.

Legal Factors Affecting Ford Motor Company

Amidst the fall of Ford, the legal case between Firestone and the company has resulted in bad publicity and loss of consumer trust. The market share should have been affected by this situation where Ford and Firestone could not manage the publicity and the case backfired for both parties. Ford had to recall vehicles that had these tires on.

Also, infringements in patents and intellectual property laws, employment and health & safety laws for employees and e-commerce laws of countries should be observed.

International cases with other automotive companies and other companies could impact the company’s image across the globe, thus the company should manage the PR practices along with the case.

The company should also keep an eye on for legal frameworks and changing regulations on the local level in countries. Because the company has plants all over the world, employee benefits that are implied to be mandatory by the government and work legislations could also have impact on the company as well.

Environmental Factors Affecting Ford Motor Company

Over time the customer base started to show interest in environment friendly solutions in many areas. Vehicles are a big part of this trend, and thus brands in the U.S. started to explore ways to develop more environmentally friendly vehicles for consumers. If the company lags behind the other brands to develop green alternatives, it should focus on benchmarking and follow the competition in this area.

Availability of certain non-renewable energy sources like gas and oil have a huge role in the automotive industry. As the oil sources continue to decrease, automotive companies should look for alternatives — and in this case, green alternatives seem to be the best solutions as consumers become aware of climate change and pollution. Bill Ford is known as “tree hugger” which makes the company focus on the environmental alternatives supported by the top management.

All PESTEL factors should be monitored on both the international and local levels as Ford Motor Company is a global automotive manufacturer with its operations spread across the globe. The company has potential growth areas for the future and threats that can have impact on its business operations if not watched closely.

2.2.Porter Five Forces Analysis: Ford Motor Company

Threats of New Entrants

· Required capital costs and investments are high (weak force)

· Building brand equity is costly (weak force)

· Economy in turmoil (weak force)

Automotive industry is a rather stable one as new entrants are not common. However, when new entrants come into play, they bring innovation, new aspects and fields to improve that the incumbents somehow ignored. New entrants cause challenges like reducing prices and costs, value propositions that are not offered by incumbents.

Ford Motor Company should continue to innovate relentlessly to attract new segments of customers and should improve the brand equity and positioning in the eyes of customers. The company also should give a reason for old Ford drivers to buy new ones.

There are several tools for Ford to use when new entrants start to challenge the market including building economies of scale that the new entrant could not achieve the same reduced costs, improving R&D processes and attracting the talent in the market to keep innovating.

Companies like Ford impose a huge cost to enter the market as the company has lots of plants and employees, has a huge business operation going on all over the world and a brand equity almost impossible to undermine. As the economy is in a bad situation and going through a recession, new players cannot penetrate the market because of the increased interest rates. In times like these, consumers demand incentives and discounts even more and new players do not have the adequate strength to provide these demands. The automotive industry’s high costs of capital, conducting the business and developing a brand equity in fact show prominent weak force for new entrants.

Rivalry Among Existing Competitors

· Competitive aggressiveness of brands (strong force)

· Price competition (strong force)

· High exit barrier for companies in the industry (strong force)

· Moderate number of firms (moderate force)

Facing tough competition around the globe, Ford should both innovate disrupting the market and should show a sustainable innovation to keep the cutting-edge technology the best in the consumers’ eyes. To do so, the company even acquired Volvo to expand its luxury car segment substantially.

The U.S. automotive industry is highly competitive and a cyclical business that is known for overproducing vehicles. In this environment, the company should position itself as one of the top players, and thus should take top players like General Motors, Volvo and Toyota as competition. Because the automotive industry requires high costs and investments, the companies in the industry will pursue competition rather than leaving the industry; this is a strong force that affects the company. The competition will proceed and thus Ford should take its competitive advantage to the maximum.

Ford was lagging behind Toyota and General Motors in producing best-class vehicles, and in January 2004, Toyota surpassed Ford and took its place in the market. Especially in the late 90s, General Motors was challenging the market leader position of Ford.

The rivalry amongst these companies was based on product quality and design, and Ford has focused on delivering incentives and discount schemes to customers. As Japanese had great design and quality, they also introduced such schemes to steal market share even more — this is a huge mistake of Ford as price strategies could be easily replicated, when product quality and technology behind design is more complex and hard to replicate.

In terms of acquiring raw materials, we see that GM and other companies have successfully hedged their risks on purchases of precious materials and Ford has failed to do so due to issues regarding the internal communication — this poses another growth area for the top management. Highly competitive consumer financing offers have caused profit margins to decrease, and companies started to look for growth without profitability — this is coupled with Japanese and other companies’ excellence in delivering product design and quality.

The company has strong ties with marketing and financial networks, although it has gone through conflicts with some partners. Once a leader across multiple fronts, Ford should tighten these relationships to overcome the competition.

In the automotive industry, competition is derived from the product quality and lean production — although Ford has been the leader in the production methods, the company stumbled to keep this sustainable advantage and gave the rein to its competitors. Compared to its competitors, Ford’s time to produce is higher and thus creating much more cost for the company, squeezing its profit margins even more.

Bargaining Power of Buyers

· Moderate substitution cost (moderate force)

· Moderate size of purchase for individuals and families (moderate force)

· Moderate substitutes (moderate force)

As consumers and product makers co-create value propositions, the bargaining power of buyers dramatically increased for the automotive industry as well. With minimum prices in their minds, consumers are demanding a lot from vehicle manufacturers. To balance this force, the company should grow a large customer base among its middle and lower segments, and innovate new products at large — this lowers the discount demands of customers while reducing the effect of competition among the customer base.

Ford has strong brand recognition, however buyers can still significantly influence the way Ford does its business, and a small change can cause the company a great loss. The best option here is to increase customer satisfaction among the customer base across all segments and increase their switching costs. The switching cost is not only the price, it could be the peripheral aspects of being a Ford driver, thus the company should conduct a marketing communication that increases the brand equity and its luxurious associations with the brand. Acquisition of Volvo, in this sense, plays a key role in building brand equity and loyalty among the target audience in this segment.

Threats of Substitutes

· High switching costs (weak force)

· High performance and design of substitutes (strong force)

When the customer base of a segment is faced with a new offering by another company, profitability may suffer — thus, Ford should position itself in a uniquely differentiated way. The company may become a service oriented one instead of a product-oriented; technological capabilities of the company can play a huge role here.

Because vehicles are oftenly bought with loans, the switching costs here are huge for the customer, and other substitutes have little or no added-value aspects compared to Ford. Should the company understand the needs of the customers and deep-dive into it, it may both increase the switching cost and threat of being substituted.

As other brands like General Motors and Toyota provide its customers with constant innovation, Ford is less preferred by customers. Lean production methods help save funds to keep the innovation going for other brands, while Ford focuses on price-based strategies and providing customers with financing options. This results in a damaged brand equity, and customers start to prefer other brands that provide innovative solutions with great design over discounts.

Bargaining Power of Suppliers

· Moderate supplies for automotive industry (moderate force)

· Moderate number of suppliers (moderate force)

Vehicle manufacturers buy their raw materials from different suppliers — and in the case of Ford, this is imperative as the company has operations spread across the world. Because the increased power of suppliers may decrease the profit margins of Ford, the company should build a value chain that is constituted from multiple suppliers; using various raw materials to produce the same part of vehicles, as they may change the raw material if necessary, and arranging agreements with suppliers that their businesses depend solely on Ford — which will increase the bargaining power of the company.

2.3.Competitive Profile Matrix (CPM)

In the external and internal environment, there are some positive and some negative aspects for the organization.

The CPM rating represents the company’s response to the crucial performance variables.

In CPM, there are some significant points related to ranking. Rating for each factor is applied as;

· The response is poor represented by 1.0

· The response is average is represented by 2.0

· The response is above average represented by 3.0

· The response is superior represented by 4.0

The weight attribute in CPM shows the relative importance of the factor in the company’s business being efficient. The weight range from 0.0 means not important and 1.0 means important, the total of all weight allocated to variables must be equal to 1.0 otherwise it would not be considered right to quantify.

The result obtained after multiplying each factor rating with the weight, is the weighted score value. Furthermore, the sum of the weighted score is equal to the weighted total score,

For the CPM matrix, the average weighted score is 2.5 The total weighted score of the business higher than 2.5 is considered to be good in the area. The other dimension of CPM is the business with the higher total weighted score considered among the competitors as the winner.

Ford Motor company has two important competitors in the market which are, General Motors and Toyota. Seven critical success factors were determined to see Ford’s place in the market.product quality, Financial position and Brand Recognition are the most crucial success factors.

According to the competitive profile matrix General Motors had the highest weighted score with respect to Ford and Toyota.

2.4.Value chain analysis

Primary Activities:

Inbound and Outbound logistics:

Ford’s manufacturing network is spread globally. Ford had production facilities on six continents and was selling its products worldwide. Logistics played an integral part in Ford’s supply chain’s effective and profitable service. The role of logistics, whether inbound or outbound, is integral to preserving productivity in the supply chain.

Operations :

Ford is a multinational brand and in virtually every corner, it has sales across the globe. It works internationally with its headquarters, assembly plants and dealerships. Manufacturing and manufacturing plants, distribution centers, stores, sales or administration buildings, and engineering centers are among the key assets. Based on the geographic region of operation, with the automotive industry entering global motorization, the markets of Asia, Middle and South America and central and Eastern Europe had a good area for Ford.It has achieved success in environmentally friendly vehicles produced with new hybrid technologies.Ford uses technology to drive higher productivity in its manufacturing and supply chain network. He made unique designs using technological developments with Ford engineers’ teams.

Marketing and sales:

Marketing and sales practices at Ford emphasize innovativeness and quality of the brand, as well as, offer appropriate financing options to the customer. The company sells cars, SUVs, and trucks in global markets. Ford has implemented a strategy for retailing and the recovery of scraps, where Ford can sell and market all aspects of the automobile business, except for production sales in the automotive field. The Premier Automotive Group (PAG) established a corporate division within the Ford Motor Corporation in 1999 to manage the business affairs of the high-end automotive products of Ford.

The automotive industry is highly competitive and, as workers can be a significant source of competitive advantage for any brand, firms want primarily on carefully handling them to ensure their job advancement. When Bill Ford became CEO of Ford Motor Company in October 2001, he brought in a new management team to use this strategy. Bill Ford had a pro-employee, even pro-union reputation. The important effect of this situation increased the trust of the company employees and strengthened their loyalty to the job. Thus the service provided by company employees has improved positively. A wide variety of goods and services have been introduced to the market by Ford. It has continued to develop its product range through a continuous focus on research, development, and production systems. It achieved its strategy in retailing and scrap purchasing by purchasing Kwik-Fit, a service network of 20,000 automobile service centers in the UK. With this strategy, both the sales-marketing area has expanded and has gained great upward momentum in the field of service. Ford also provides financial services through Ford Motor Credit Company LLC (“Ford Credit”).

2.5.Financial analysis

Note: Above ratio calculations may be subject to rounding errors.

a. Liquidity

It seems that Ford Motor Company’s liquidity is with up and down as the current, acid-test and cash ratios indicate. It is clear that Ford Motor Company’s ability to fulfill its short-term debt obligations and to pay its short-term obligations when they are due is not fully met. It shows how many times short-term debt obligations are met by cash and liquid assets. And those values are always smaller than 1 means the short term obligations are not fully covered. So, the company is not in a very good financial situation and it may fall into financial difficulties. When it is reviewed the balance sheet, it is observed that the cash balance has increased creating more liquidity within the total current assets. The most important problem at the base is increasing in current liabilities over time while the current assets are unstable. Ford Motor Company’s cash and cash equivalents, marketable debt securities may be sufficient to meet their liquidity needs. The company may need cash and may need to raise funds via available liquidity and cash flows from operations and future debt issuances.

b. Turnover Ratios

It seems that the company’s total asset turnover is decreasing from 1999 to 2003. It means that Ford Motor Company’s efficiency of using its assets decreased during 1999 to 2003. In the relevant period, there was a peak for inventory turnover in 2001. Then again it was decreasing and it was in the lowest level in 2003. As it seems, the most efficient year according to inventory management is 2001. It is the same for the days’ sales in inventory. Also, the receivable turnover was unstable in relevant years. The peak receivable ratio is in 2002, so the company fastest collected its money in 2002 and the average collection period increased while the inventory turnover actually increased.

While the assets increased, the debt ratio also increased significantly. It seems that the company runs up debts more short term debt than long term debt. Times interest earned are increasing 2000 to 2003 which means the Ford Motor Company’s ability of covering the interest payments for its debts are increasing. From 2000 to 2003, the cash coverage of the company showed the same reaction with times interest earned, so the company was increasing its ability to generate cash from operations.

d. Profitability

After Income Statement check, it is seen that during 2001 and 2002, net income was minus. When it is considered that net income is revenue minus cost of goods sold and other expenses, the company has lost in 2001 and 2002. After that company has increased its net income and again it could have profit. Total asset turnover is decreasing which means the company doesn’t perform well because lower ratios show that the company’s assets generate less revenue per dollar. Other measures for profitability are operating profit margin and gross profit margin. In this five-year period, it is observed that operating profit margin increased until 9.77% but in 2003 it dropped to 8.19%. On the other hand, there is an decrease in gross profit margin that depends on gross profit and sales. This shows that the income coming from operating activities are decreasing whereas non operating income is decreasing. In order to solve this problem, operating expenses should be decreased.

e. Market value

Earnings per share were negative in 2002 and 2001. It means Ford Motor Company has negative earnings in these 2 years. It may be because of environmental factors that are out of the company’s control. In 2003, earning per share became positive so the companies could generate sufficient profit and eliminate the risk of bankruptcy. The highest market to book value is in 1999. However all of the markets to book values are quite under the 1, so the company couldn’t succeed in creating value for stockholders during 1999 to 2003.

2.6.SWOT analysis

1)Strengths

Ford Motor company had an extremely strong brand awareness, a strong financial and marketing network, and also was known for its innovative products in the sector. Many of its products were particularly well known and in great demand. Throughout the history of the company, it has pioneered many firsts. The company made the difference by establishing the first modem auto assembly line that allowed the Model T Class to be manufactured at a cost within the reach of the masses. And others it has been the world’s largest truck manufacturer. Apart from Ford’s popular brands Taurus and Explorer, it has also been in the sports utility vehicles market. With its sporty off-road vehicle, it has gained a contemporary place in this market as well. Ford Credit and Hertz Corporation, two subsidiaries of Ford Motor Company, have had significant success. With the expansion of Ford Credit, it created a greater profit margin than the main automotive sector. Ford didn’t just benefit its own vehicles and it also benefited all brands in the changing times.

2) Weaknesses

Ford has had a lack of focus in some particular areas. Ford’s key focus wasn’t on competing with better models and quality. The key focus on financing options for its customers. It also lacked focus on core areas of product development, manufacturing systems, and finance. Ford Motor company failed to protect the risks on precious metal purchases in January 2002. The lack of communication between the procurement, research and treasury departments within the company caused huge losses. The quality problems of Ford’s automobiles caused its reliability in the market to decrease. As a result of this problem, both companies are blaming each other and leading to bad impressions. Ford had to recall all its vehicles with this tire on the market. Other quality problems that he generally experienced in his vehicles continued. In the survey that measured vehicle durability in 2003, in Exhibit 5 is in the eighth place as can be seen. Ford’s teams of engineers each put a lot of effort into creating unique equipment, and as a result, they created an over-engineered design, but it was a costly vehicle and consumed a lot of time compared to its competitors.

There are three elements that threaten the Ford company. New entrants to the market, cost constraints in the competitive market and the strengths of foreign competitors. Ford’s product that maintained its superiority until that time remained behind with the products released by General Motor in 2001, soon lost its leadership position to General Motors. Another major threat Ford faces in the aftermath were powerful newcomers in this developed market of the auto industry. There were many foreign competitors who are fighting fiercely for market share and producing a wide variety of tools to meet customers’ demand. In 2004, the strength of its competitors and the quality problems it experienced caused a loss of economic power. Even Ford’s newest models were only sold with incentives and discounts. To turn this into an opportunity, its daily competitors took an aggressive way to lower their credit ratings. Finally, if Ford and the auto industry face an increase in raw materials or a continuation of low credit rating, then they will have to increase vehicle prices and operating profits will be thwarted.

4) Opportunities

One of the possibilities Ford used was that the automotive industry in the United States was competitive. The number of cars and trucks sold to retail buyers in the country, or the industry demand, was increasing. Whatever the reasons for the increase, this created an opportunity in the market for the company. The volume of growth was challenging in the US market, where automobile manufacturers were intense and diverse. But the markets of Asia, Central and South America, and central and eastern Europe were hope for cars. A new era of the automobile industry was beginning, and this “global motorization” was a great opportunity for Ford.

2.7.SPACE matrix

The SPACE Matrix consists of four areas which are ,Competitive Advantage (X axis), Financial Strength (Y axis), Industry Strength (X axis) and Environmental stability (Y axis).

CA Average is = -2,5

IS Average is = 3,75

FS Average is = 1,75

ES Average is = -2,75

Vector Coordinates;

X axis= -2,5 +3,75=1,25

Y axis= -2,75+1,75= -1

As a result of the SPACE Matrix Ford company must improve its competitive skills.

2.8.TOWS matrix

Ford Motor Company

1. The reputation of Ford in managing a lot of successes and firsts, such as creating the first modern assembly line

2. Ford is the world’s largest truck manufacturer.

3. The expansion of the Ford Credit created more profit margins than the core automotive sector.

4. Ford had good brand awareness and a strong network for financial and marketing. The organization was praised for its creative goods.

5. In the market for sport utility vehicles, Ford managed to obtain a strong hold.

6. The achievements of Ford Motor Company’s subsidiaries, Ford Credit and Hertz Corporation.

1. In some particular areas, the lack of focus

2. The lack of coordination between the departments of purchasing and treasury

3. There are quality problems at Ford’s automobile models

4. Consumption of too much time to design goods that raise prices and are over-engineered.

Opportunities

1. Depending on the general economic environment, the variability of the automotive industry in the United States, the cost of buying and running cars and trucks, the availability of credit and fuel.

2. The automotive industry has entered the “global motorization” era.

1. Increase marketing to attract customers to spend. (S4, O1)

2. Produce vehicles capable of supporting new technologies. (S1, O2).

3. Market products at low prices by offering more competitive credit options. (S3, S6, O1)

1. Restore facilities to increase product quality. (W3, O2)

1. New entrants coming into the market

2. Cost pressures

3. Foreign rivals’ strength.

1. Use a strong distribution network to reach out the customers and eliminate new entrants in the market. (S4, T1)

2. Invest in intellectual property rights. This would help competing better in the market. (S1, T1, T3)

1. Reduce threat of competition by developing flexible product line (W3, T1, T3)

2. Improve fuel consumption (W4, T2)

3. Focus on cost effective strategies. (W1, T2)

2.9.QSPM analysis

Strategy -1 : Ford should improve its product quality.

Strategy -2: Ford should establish a more flexible manufacturing system.

Strategy-3: Increase the efficiency of Ford Finance.

(Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable; 0 = not relevant)

As a result of QSPM, it is clear that strategy-1 is the best option for Ford Motor Company while the others are close to each other’s.

3.CONCLUSION

In that case study, Ford Motor Company’s strategic analysis was made which covers the years 1999 and 2003. We have covered; General Environment (PESTEL framework), Porter’s five-forces analysis, Competitive Profile Matrix (CPM), Value chain analysis, Financial analysis, SWOT analysis, SPACE matrix, TOWN matrix, QSPM analysis.

Political, economic, social, technological, environmental and legal factors should be considered on both the international and local sides because Ford Motor Company is a global automotive maker with its operations spread to six continents. The company should watch closely its business operations to see potential growth areas for the future and threats. because it is affected by the political and economic conditions of the countries where it operates. Also it should catch up with new environment friendly trends and new technological improvements to better compete with other automakers.

It seems that although Ford is a very old and well-established company and a pioneer of many innovations, it fell into the background compared to its competitors. It can be seen in the competitive profile matrix, too. Because General Motors has a higher score than Ford.

Ford had production facilities on six continents and was selling its products worldwide. So, it has a huge impact of having effective and profitable supply chain service. Ford could manage good operations in Asia, middle and South America and central and Eastern Europe. Also, Ford is good at emphasizing innovativeness and quality of the brand, moreover Ford offers appropriate financing options to the customer. Selling cars, SUVs, and trucks in global markets is also an asset for the company. Ford developed its product range through a continuous focus on research, development, and production systems. By purchasing Kwik-Fit both the sales-marketing area has expanded and has gained great upward momentum in the field of service.

After Ford became the most profitable automaker in 1998, its stock price rose by 130 percent. Unfortunately, the company had started to face financial difficulties in the early 2000’s. The company had a cash problem and it was long term borrowed. The company couldn’t balance its finance and it has a negative income which means Ford took a loss. It is maybe because of recalls of many cars, or unnecessary stock of valuable metal. And also non-effective and long-time production style was more costly than other automaker companies. Then, the new CEO, Bill Ford, managed to improve Ford’s financial situation a little. It was able to increase the negative profits and raise the company’s share value, if not as much as before.

Ford Motor had extremely strong brand awareness, a strong financial and marketing network, and also was known for its innovative products in the sector. However Ford’s key focus wasn’t on competing with better models and quality. The key focus was financing options for its customers. It also lacked focus on core areas of product development, manufacturing systems, and finance which are quite important for a manufacturer. So, new entrants to the market, cost constraints in the competitive market and the strengths of foreign competitors were badly affecting Ford. Besides tough competition between American automakers, also ford was affected by Japanese company’s market share. Hard competition could be an advantage to growth in the markets of Asia, Central and South America, and central and Eastern Europe and this “global motorization” was a great opportunity for Ford. Also in order to deal with that hard competition Ford company must improve its competitive skills like; brand image, innovation, market share and product quality.

It seems that Ford needed to increase marketing activities to attract customers to spend. It was beneficial to produce vehicles capable of supporting new technologies. Also it was helpful of market products at low prices by offering more competitive credit options. Ford was also needed to restore facilities to increase product quality and invest in intellectual property rights. Moreover, developing flexible product lines, improving fuel consumption and focusing on cost effective strategies would reduce threats. Finally, improving its product quality, establishing a more flexible manufacturing system and increasing the efficiency of Ford Finance would be important for Ford.

Emrah Aydin, Secil Kara, Bugra Kaya, Gonca Turna, Ilayda Cevik

Written by Emrah Aydın

Data Analytics Contractor in London | Supervisory Board Member and Volunteer of SACB | Master's Degree in Big Data Analytics

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Henry Ford did not invent the automobile. But more than any other single individual, he was responsible for transforming the automobile from an invention of unknown utility into an innovation that profoundly shaped the 20th century and continues to affect the 21st. Innovators change things. They take new ideas—sometimes their own, sometimes other people’s—and develop and promote those ideas until they become an accepted part of daily life. Innovation requires self-confidence, a taste for taking risks, leadership ability, and a vision of what the future should be. Henry Ford had all these characteristics, but it took him many years to develop all of them fully.

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How a century-old brand is transforming the auto industry

Before the pandemic, automakers were already facing massive disruption, including driverless cars, electric vehicles, and shared mobility. But COVID-19 dealt another blow: Automotive was one of the hardest hit sectors in 2020, especially in the U.S., where auto sales sank by 15% .

In the midst of these unprecedented challenges, however, 118-year-old Ford Motor Company leaned in and began to reinvent itself.

As the virus accelerated, dealerships were forced to close their lots and shift to servicing and selling cars online , while larger supply chain concerns caused shortages in critical parts like microchips, which slowed vehicle production.

In the midst of these unprecedented challenges, however, 118-year-old Ford Motor Company leaned in and began to reinvent itself. Under the leadership of two new executives — Jim Farley as CEO and Suzy Deering as global CMO — the company saw an opportunity for business transformation and started mapping out a strategy.

Questioning everything, from its organizational structure to its customer experience, Ford made difficult decisions to put technology at the center of its business and get ahead of auto consumers’ evolving needs.

While still in the early stages of its journey, Ford has developed something of a blueprint for auto brands of the future. Recently, I spoke to Farley and Deering about the company’s transformation strategy. They shared three key changes they’re focused on.

1. Reimagining what auto brands do

Business transformation has been a buzzword for decades, but for years, it wasn’t an urgent reality for Ford. Then along came the pandemic, and its significance accelerated.

We have to invest in electric architectures and build software know-how in the company. And we need to integrate that know-how in ways we’ve never had to before.

“Events of 2020 made it clear that modernization is required to be a sustainable company,” explains Farley. A critical factor to modernizing has been disrupting its organizational model to aid the shift toward vehicle electrification and other digitally connected products. Since consumers expect more safety and convenience from automakers, the future of the auto industry will increasingly exist outside the doors of the vehicle.

According to Farley, this has required Ford to “unglue” its organization to allow for a new way of being. “The biggest transformation for us is to a software services–dominated company and brand,” he explains. “We have to invest in electric architectures and build software know-how in the company. And we need to integrate that know-how in ways we’ve never had to before.”

Such a fundamental pivot, Deering acknowledges, impacts company culture. “We have to make sure that we bring people along with us, and at the same time, give them the space to fail. There is strength in knowing that change is not going to be easy, but we’re going to do it together, and we’re going to look forward.”

2. Driving the connected car experience forward

By committing to look forward, the automaker is building on Henry Ford’s original vision — that every American consumer can own a vehicle — by reimagining what vehicle ownership looks like. Through software and other technology, Ford is working to ensure that it’s a fully connected, always-on experience.

When we have the ability to update our products dynamically with software, the customer relationship is no longer episodic. It’s every day.

“For so long, cars have really been isolated from the rest of people’s lives. We can change that by making them digital products,” Farley explains. To facilitate this shift, Ford has tapped into strategic partners like Google and is integrating software into its vehicles. Beginning in 2023, for example, millions of Ford and Lincoln models will be powered by the Android operating system, with Google apps and services built in.

Beyond offering drivers more assistance and convenience, connected vehicles also give Ford the ability to deepen its customer relationships. “When we have the ability to update our products dynamically with software, the customer relationship is no longer episodic. It’s every day,” says Farley.

3. Transforming the customer relationship model

To deliver on its vision of an always-on customer experience, Ford is also evolving how it approaches relationship-building. While many automakers stick to a traditional acquisition model to attract consumers through ads and rebates, Ford is bringing customer relationships to the forefront by shifting to a loyalty-based model.

“Another big transition for us as a company — and an industry — is to stop being obsessed with conquest and start putting all of our resources into taking care of the customers who already love the brand and own the product,” Farley explains. “This is a model that is available because of the always-on nature of digital. Our products and services are now integrated.”

We want to know our customers well enough to meet their needs while they’re in the vehicle, while they’re outside the vehicle, and before they even think about buying a vehicle.

Gearing marketing efforts to meet people’s ongoing needs in a more personalized way is critical to Ford’s loyalty-based push, because, as Deering points out, “The customer expects us to know them.”

For Deering and her team, this means relying more than ever on first-party data and signals to create an ecosystem that nurtures deeper relationships. “We want to know our customers well enough to meet their needs while they’re in the vehicle, while they’re outside the vehicle, and before they even think about buying a vehicle from us,” she explains.

While Deering and Farley both readily admit that Ford’s business transformation is a yearslong journey, they’re committed to playing the long game and continuing to drive brand love and loyalty through the 21st century.

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Ford Motor Company Case Study

• To find inspiration for your paper and overcome writer’s block
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Looking for Ford industry analysis? Find it here! We’ve prepared Ford Motor Company case study that contains analysis of the company’s financial condition and provides recommendations to its management.

Introduction

• Industry Analysis
• Environmental Scan
• Financial Condition
• Recommendations

Works Cited

The current report provides an in-depth analysis of the motor vehicle industry based on the Ford Motor Company case study. It also analyzes Ford Motor Company using SWOT analytical tool. Moreover, strategies that could be adopted by Ford Motor Company for the next five years have been provided. The study is divided in several sections with the first section being the motor vehicle industry analysis.

The industry analysis explores the industry structure, major environmental changes, competitors, and Ford’s competitive position in the industry. The second section gives an environmental scan with major focus on the major opportunities and threats. The third section explores the company’s key strengths and weaknesses. The last section gives viable strategic recommendations which can be adopted for the next five years.

Ford Industry Analysis

The motor vehicle industry is very competitive and characterized by changes in vehicles design and technology (CLLES 7. Just like any other industry, the motor vehicle industrial structure and landscape have been changing and reshaping operationally, functionally, and geographically.

The increase in competition has been as a result of new emerging automotive and vehicle industries in South American, Eastern and Central European, and Asian countries (CLLES 7). The industry’s major structures are the motor vehicle and the motor vehicle parts sections.

These two sections provide employment to more than one million people in U.S. The motor vehicle industry is a loosely connected industry and diversified in terms of supply chain structure, employment levels and compensation. Lastly, the market is characterized with excess capacity which is a major structural problem.

The industry was highly affected by the 2007/2008 global financial crisis. Major players such as Chrysler and General Motor were majorly affected that it took the intervention of the government to bail them out.

However, based on the case study, Ford Motor Company was the only major company which was not affected by the financial crisis. The company has been described by as the only automaker company which has survived the major crises that have hit the motor industry without financial bailout by the government (The New York Times 2012).

The major competitors of Ford Motor Company are BMW, Chrysler, Toyota, General Motors, Honda, Nissan, Mercedes Benz, and Hyundai-Kia among others. In U.S, General Motors (GM), Toyota, and Honda are the main competitors of Ford (Canis and Yacobucci 6). Different automakers use different strategies to increase their competitive advantage.

Based on the case study, Toyota uses lean production to increase its effectiveness and efficiency in production. Toyota’s lean production encourages just-in-time scheduling, flexible production, teamwork, and quality production. In addition, the company avoids material wastage and inventories. Another company like Hyundai produces quality products to meet the demands outside Korea.

For instance, the company has recently established a production line in Alabama, U.S to near KIA to benefit from economies of scale (Canis and Yacobucci 6). In addition, the company offers the longest warranties which are geared towards the attraction of customers from the Japanese and US cars. In general, all the major competitors have brand product portfolio which are part of product diversification and cost differentiation.

General Motors which is the largest competitor of Ford Company has adopted a new strategy which has been borrowed from Toyota Company (Ferrell & Hartline 30). The new strategy is based on new auto designs which meet the expectations and demands of emerging market segments.

The company has acquired the Toyota’s design which involves synchronization of production, platforms, and parts from different parts of the world. This new globalization strategy encourages flexible manufacturing. Based on checks and benchmarking carried by Henry (91), the competitors in the automobile industry are grouped in four groups.

The first group is of high price and low range automobiles and it consists of Rolls Royce and Bentley. The second group comprises of Ferrari, Ashton Martin and Porsche while the third group contains BMW, Mercedes, and Lexus. The last group is composed of Ford, Renault, Honda, Volkswagen, GM, Nissan, Toyota, and Daimler Chrysler (Henry 91).

The Lexus, BMW and Mercedes group produces highly priced and quality products but of a lower product range. The Last group produces a broad range of products which have considerably low prices and quality compared to other groups. In this group, competitors compete in the market based on reliability, price, and the design of their products (Henry 92).

Ford is the second largest automaker after General Motor. The American automaker has found its niche in car and truck production. The company has a strong brand which has improved its competitive advantage. Product diversification has been the major competitive advantage thus increasing its competitive position in the industry.

To maintain its competitive position, Ford brands product portfolio comprises of Ford Ikon, Ford Fiesta, Ford, Fusion, Ford Endeavor, and Ford Figo. Its survival under numerous financial crises has increased the confidence and trust from different stakeholders especially consumers (The New York Times 2012). In North America, Ford remains as the largest market shareholder.

However, the company receives high competition in new emerging markets in Asia and Europe. Nonetheless, the American automaker has continued to defend its position in the industry and in 2008, it closed the gap that existed between itself and Toyota. The company was able to sell over 55,301 vehicles compared to Toyota in 2009 (Canis and Yacobucci 6).

Based on the current statistics, Ford has a market share of 15.5% after GM which has a market share of 19.8 percent (Canis and Yacobucci 6). The fall of GM and Chrysler was beneficial to Ford as many buyers between 2008 and 2009 preferred Ford cars thus increasing its financial and competitive position in the market.

As other companies market shares declined, that of Ford increased. To remain competitive, the company has provided new models which are affordable, competitive, and environmentally friendly.

Ford Company Analysis: Environmental Scan

Environmental scan has been carried through the use of SWOT analysis to give the major opportunities and threats that Ford Company has.

Company analysis

Ford Company Analysis: Financial Condition

The company is in a better financial position compared to other players such as Chrysler and GM. In 2008, the company survived the U.S and Europe financial crises (The New York Times 2012). In addition, as other companies’ market share reduced, Ford’s market share increased to 15.5% while that of GM’s dropped to 19.8 % (Canis and Yacobucci 6). In 2009, Ford increased its sales by 55,301 vehicles compared to Toyota.

In 2011, Ford increased its small cars sales in U.S by 25 percent (Ford Motor Company 2012). The annual operating profits of Ford increased in 2011 and as a result, the company announced an operating pre-tax profit of $8.8 billion (Ford Motor Company 2012).

In a third year in a row, the company has announced improved annual operating profits which show that the company is in a better financial position. According to Ford Motor Company 2011 annual sustainability report, the company has increased its annual automotive gross cash which is a sign of financial progress (Ford Motor Company 2012).

The revenues of Ford have grown from USD 119.3 billion in 2011 to USD 128.2 billion in 2012 (Bloomberg Businessweek 2012). In addition, the company has reduced its sales pegged on income tax expense to -0.90% from -0.505 thus leading to a bottom line growth of USD 20.2 billion from USD 6.6 billion (Bloomberg Businessweek 2012).

Because of its financial position, the automaker plans to invest $16 billion in the U.S production plants with the objective of designing, engineering and producing upgraded vehicle components. Therefore, Ford Motor Company financial position is strong despite the recession and economic downturns.

Ford Case Study: Recommendations

Based on the industry and company analysis, some suggestions have been provided which can be applied for the next 5 years as part of strategic plan management. First, Ford needs to expand its market operations in emerging economies in Africa, Middle East, and Asia so as to reduce overreliance of the U.S market. This would expand its market share and meet new demand in new market segments.

Second, the company needs to diversify its products to meet the demands and expectations of consumers in the 21 st century. Ford needs to carry out market and consumer demand research to determine the major emerging market trends and patterns. Product diversification can be achieved through the production of more fuel efficient and environmentally clean cars which are small in size.

This would meet the demand in the new segment of environmentally sustainable and green fuel motor vehicles. Ford can adopt the strategy adopted by Toyota of producing a variety of cars annually which fit different market segments. For example, it can design cars that meet the income capacity of consumers in developing nations.

Drawing from the case study analysis, Ford is the second largest American based automaker in the world. In addition, the company operates in a very competitive and saturated market. As a result, the company faces high level of competition from major players such as BMW, GM, Toyota, Honda, Chrysler, and Mercedes Benz among others.

When grouped, Ford lie at the lowest group which produces broadest range of cars which affordable prices. The company is a strong brand which is globally known. Its financial capacity and presence has increased its market share. The major weakness of the company is that it highly depends on the U.S market. Financial crisis in Europe and U.S have threatened its performance and market share.

Financially, Ford is stable and in a better position. The company has increased in sales and revenues as well as pre-tax operating profits in a consecutive period of three years. it has been recommended that the company ought to increase its presence in emerging markets and produce diversified products

Canis, Bills and Brent D. Yacobucci. “The U.S. Motor Vehicle Industry: Confronting a New Dynamic in the Global Economy.” Congressional Research Service 26 Mar. 2010: 1-66. Print.

CLLES. Benchmarking Analysis for the Motor Vehicle Industry. Center for Lean Logistics and Engineered Systems. University of North Carolina, 2009. Print.

Bloomberg Businessweek. “Ford Motor Co (F: New York).” Bloomberg Businessweek 6 Dec. 2012: 1. Print.

Ferrell, O C, and Michael D. Hartline. Marketing Strategy . Mason, OH: Thomson South-Western, 2008. Print.

Ford Motor Company. “ Financial Health – Sustainability 2011/12 .” PDF file. 7 Dec. 2012. < https://corporate.ford.com/homepage.html >.

Henry, Anthony. Understanding Strategic Management . Oxford: Oxford University Press, 2008. Print.

Schwed, Joel. Ford: History and Corporate Profile . 12 Dec. 2011. Web. < http://www.valueline.com/Stocks/Highlight.aspx?id=12047 >.

The New York Times. “Ford Motor Company.” The New York Times 30 Oct. 2012: 1. Print.

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The Turnaround at Ford Motor Company

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Berkeley Haas Case Series

The Berkeley Haas Case Series is a collection of business case studies created by UC Berkeley faculty

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Disruption in Detroit: Ford, Silicon Valley, and Beyond

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Pub Date: Dec 31, 2017

Discipline: General Management

Subjects: Innovation, Leadership, Technological change, Technology, General management, Business models, Organizational change, Disruptive innovation

Product #: B5905-PDF-ENG

Industry: Automobiles

Geography: United States, Michigan, California, Silicon Valley, China

Length: 16 page(s)

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How Ford Adapted To The Changing Automobile Market

Table of contents.

Over its 118 year history, the Ford Motor Company has led the way in innovative technologies and leading business practices. 

Important stats to know about The Ford Motor Company: 

• Controls 13.9% of the US automotive market share in 2022
• Revenue of $136.3B in 2022  
• Headquartered in Dearborn, Michigan
• Produces over 4 million vehicles each year
• Employs over 182,790 employees around the world
• Ranked #21 in the Fortune 500
• Market value of $54.51 Billion as of Feb, 2023

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The History of The Ford Motor Company

Henry ford’s vision.

The Ford Motor Company has a long history that was inspired by Henry Ford, an Irish immigrant to the United States. Ford realized that the world’s transportation needs were quickly changing at the turn of the 20th century. His first attempt to design and build an automobile was in 1896 when he created his first vehicle — the quadricycle. The vehicle had a simple design with a bench seat for two passengers, a four-horsepower engine, bicycle wheels, and a gearbox with two speeds (but no reverse). 

Henry Ford on his “quadricycle” 

In November of 1901, Henry Ford joined the Detroit Automobile Company, a car manufacturing company, but his time there was short-lived. He left the company the following year. This company went on to become the Cadillac Motor Company (which was later purchased by General Motors). 

The Ford Motor Company was founded in 1903 when Henry Ford used $28,000 of investor money (about $800,000 in today’s money) to open a manufacturing facility. One of the early investors was John and Horace Dodge who would go on to create their own car manufacturing company. Because investors feared that Ford would leave the company like he did the Detroit Automobile Company, a local banker, John S. Gray was chosen as the first president. 

Leadership under the Ford family

Henry Ford did eventually become president and controlling owner of the company in 1906. Ford was directly responsible for the early success of the company including the popular Model T and innovative assembly line processes. He held this position until 1919 when his son, Edsel Ford, took over as company president. 

Edsel Ford was an artist and led the company to change the design of cars from practicality to visually appealing. The newly designed Ford vehicles were a hit with consumers all over the world. Edsel Ford died in 1943 and Henry Ford took back over as president of the company since Edsel was his only son.

Two years later, Edsel’s son, Henry Ford II took over as president and served from 1945 to 1960. The company had grown exponentially prior to his leadership. Henry Ford II worked diligently to solve many problems that plagued the organization. The bookkeeping was a mess and work processes needed to be heavily refined. Henry Ford II took it upon himself to transform the company into the polished and disciplined brand that it is today. 

Going public on the New York Stock Exchange

After a long run as a private (and mostly family-owned company), the Ford Motor Company went public in 1956. Traded under the NYSE stock ticker “F”, the IPO (initial public offering) for Ford was the largest IPO in history at the time ( $657 million worth of stock sold - $28.5 billion in today’s dollars ). 

Early competition

In the early years, the Ford Motor Company had a lot of competition. In fact, in 1920, there were approximately 200 car manufacturers in the United States . The largest companies that Ford was up against included General Motors and Chrysler. General Motors had many brands that proved formidable competitors including Chevrolet, Buick, and Cadillac. While the competition remained fierce, many of the early car manufacturers went out of business. By 1940, only 17 car manufactures remained. 

Becoming an International Brand

The Ford Motor Company owes much of its success to its expansion into international markets. The company was quick to do this shortly after its inception. The first international manufacturing facility was opened in Walkerville (now Windsor), Ontario in 1904. This was built directly across the Detroit River from Ford’s other manufacturing facilities at the time. The Ford Motor Company of Canada was established as a separate company with its own shareholders with the mission to sell Ford vehicles in Canada and other parts of the British Empire.

By 1908, Ford opened its first sales office outside of North America in Paris, France. Shortly after, Ford opened assembly plants across Europe between the years 1917 and 1925 in Ireland, England, France, Denmark, Germany, and Austria. In 1924 and 1925, Ford expanded into South America (Argentina), Asia (Japan), Africa (South Africa), and Australia. 

In 1929, the Ford Motor Company was contracted to set up the Gorky Automobile Plant in Russia which produced the Model A and AA. This helped to further industrialize the country. 

Key takeaways

• The Ford Motor Company’s early success was a result of Henry Ford’s mission to improve the automobile by creating a more durable and accessible version for the Average consumer. 
• For 50 years, the Ford family led the company with each new CEO bringing fresh new ideas. This led to innovation that helped Ford outpace the competition. 
• Early expansion into international markets helped accelerate Ford into an international brand with access to consumers all over the world. 

Cultural and Industry Impacts of the Ford Motor Company

The ford assembly line and manufacturing methods.

One of the most impactful reasons for Ford’s early success was the way they manufactured their vehicles. In the early years, the Ford factory produced a handful of cars each day by assigning 2-3 men to work on a car at a time. The car was built from start to finish. This was the normal manufacturing process of other car companies at the time. 

By 1913, Henry Ford created a new approach to manufacturing by introducing the first moving automobile assembly line where cars would move down the assembly line. Workers would be assigned one or two steps that they would perform over and over. This helped workers become better at their assigned tasks. Cars were produced at a much faster pace. This reduced the production time from 12.5 hours for a Model T to just 1.5 hours. With decreased production times, this new method drove down the cost making cars even more accessible for the average American. 

The moving assembly line isn’t the only manufacturing innovation that the Ford Motor Company has developed. In 1986, the Ford Motor Company introduced automated assembly for some subassembly tasks using robots. This process was initially tested in Ford’s St Louis facility and was a major success. This type of manufacturing is now used at most Ford plants today. 

Shaping the American workforce

The Ford Motor Company has a long history of embracing industry-leading policies in relation to its workforce. Henry Ford understood that in order to remain competitive and producing cutting-edge technology, the company needed to employ the best and the brightest. The monotonous and strenuous work of the moving assembly line created new problems for Ford with an increase in high turnover. 

In 1914, Ford responded by making a move that shocked the public and landed him on the front page of newspapers all over the country. The Ford Motor Company instituted a $5 workday doubling the existing rate of pay of assembly line workers. In addition, Ford reduced the workday from nine to eight hours allowing for the plant to run three equal length shifts (prior to that, the facility only ran two shifts). 

The most significant impact of this change was that the average assembly line worker at Ford could afford to purchase an automobile for their own families. The increased mobility, wages, and leisure time inspired a movement across the country. Many other companies began to follow suit giving the Ford Motor Company credit for the creation of the American middle class.

After the World Wars, the Ford Motor Company made significant efforts to employ many of the veterans who had returned home with disabilities. This move made the Ford Motor Company one of the first to hire workers with physical disabilities. At the time, most companies only hired able-bodied workers. Instead, Ford took a different approach. They not only hired these workers but created work environments that were modified to accommodate those with special needs. 

In 1941, Ford signed a contract with the UAW-CIO (United Auto Workers-Congress of Industrial Organizations) labor union. This contract helped drive better pay, benefits, and working conditions for Ford employees. 

Ford’s impact on the airline industry

Henry Ford understood that the transportation industry wouldn’t just expand on the ground. He recognized that air travel would become commonplace in the modern world. In 1925, the Ford Motor Company created its own airplane design. Between 1925 and 1933, the company manufactured and sold nearly 200 Ford Tri-Motor airplanes (nicknamed the Tin Goose). This model of plane was used by early commercial airlines in the United States. 

To help encourage further development of the industry, the Ford Motor Company provided 35 of the plane’s patents royalty-free including its navigation system (the navigational radio beam). This allowed other companies in the space to further develop aviation technology. 

Supporting the United States during the World Wars

Automobile manufacturing plants were easy to convert into facilities to produce other types of vehicles. In 1918, Ford’s River Rouge Complex began producing anti-submarine patrol boats, cars, ambulances, trucks, tractors, tanks, and airplane engines that would be supplied to Allied troops. As the war came to an end, Ford moved production back to civilian vehicles. 

Unfortunately, peace only lasted a couple of decades. As tensions began to churn again in the early 1940s, the US government began ordering jeeps from the Ford Motor Company. The word “jeep” came from the acronym “GP” which stood for “General Purpose”. 

By 1942, Ford once again halted civilian production of automobiles to support the war effort of World War II. The Ford Motor Company worked with Charles Lindberg, the infamous trans-Atlantic pilot, on the construction of more than 8,000 B-24 Liberator bombers.

In 1944, Rose Will Monroe was working as a rivet gun operator at Ford’s Willow Run facility. She was chosen to serve as the icon to promote the sale of bonds to support the war effort. Her fictional character “Rosie the Riveter” was featured on the iconic “We Can Do It!” posters all across the country. The campaign was a success and is noted as one of the most iconic images from the era.

• Ford’s creation of the first moving automobile assembly line sped up production allowing the Ford Motor Company to produce significantly more vehicles at a lower cost than their competitors. 
• The Ford Motor Company gained a competitive advantage by increasing wages, reducing hours, and improving working conditions. This helped them secure the best talent and improved employee morale and productivity. 
• The Ford Motor Company helped stimulate growth in industries that would purchase Ford products by investing in the development of new technologies. For example, Ford provided free patents to early airlines in hopes they would purchase Ford-built planes.
• Ford produced hundreds of vehicles to support the United States during World War I and II. The government contracts were not only profitable, but Ford became recognized for their support. The war also helped expose the global market to Ford-manufactured vehicles. 

Evolution of Popular Ford Models

The Ford Motor Company has had many major successes in its development of popular, cutting-edge vehicles over its nearly 120-year history. Some of these models have consistently held records for their high sales numbers and groundbreaking innovations. 

• Model T (1908) - The Model T was one of the most successful models released by Ford and demonstrated his vision to make automobile transportation accessible to the average person. Prior to the Model T, most automobiles were considered luxury items. The design was intended to drive down costs. Between 1908 and 1927, Ford sold over 15 million Model T’s. The other challenge that the Model T solved was its durability and easy maintenance. Most other automobiles at the time couldn’t handle the many miles of rough, unpaved roadways. The Model T solved for this using vanadium steel alloy for some of its parts so they would be more durable. 

• Model A (1927) - Ford continued to sell the Model T successfully for 18 years. However, other car manufactures soon caught on to Ford’s manufacturing process and started gaining market share. This pressure from other car manufacturers forced the Ford Motor Company to rethink their design of the Model T. This led to the creation of the Model A. Henry Ford assigned his son, Edsel, to take charge of developing the sleek new design. The Model A was equipped with innovative features like a Safety Glass windshield, industry-standard driver controls, and a fuel gauge. The Model A was produced around the world in plants in Argentina, Canada, Denmark, France, Germany, Italy, Japan, and the United Kingdom. Despite the economic challenges of the Great Depression, Ford sold 5 million Model A’s before it was discontinued in 1931. 

• F-Series Pickup Trucks (1948) - During World War II, the Ford Motor Company created a variety of military trucks. Ford recognized that these vehicles which were used to haul supplies to troops all over Europe had a civilian application as well. So in 1948, the company unveiled a new line of trucks. Earlier truck models were simply built on car platforms. This new line would be built on a chassis that was specially designed for heavy hauling. The original line came in eight sizes and weight ratings from the F-1 (0.5-ton capacity) up to the F-8 (3-ton capacity). This gave consumers the option to pick the right truck for their needs. The F-series naming was updated in 1953 to F-100, F-250, and F-350. These trucks remain extremely popular today. Over the last 40 years, the F-series has remained the best-selling vehicle in the United States. 
• Thunderbird (1954) - The Ford Thunderbird was introduced as a direct response to the Chevrolet Corvette. The car featured a sleek design that was very popular, but instead of focusing on power and speed like the Corvette and other European sports cars, they focused on driver comfort. This strategy paid off. Ford sold nearly 25x the number of Thunderbirds than Chevy sold Corvettes. (16,155 Thunderbirds compared to only 674 Corvettes).

• Mustang (1964) - In the 1960s, Ford Vice President, Lee Iacocca, wanted to create a new model targeted at younger drivers who wanted a sporty look but didn’t want to spend a fortune. Developed on a shoestring budget, the Ford Mustang was introduced in 1964 and quickly became an American cultural icon and was featured in movies and songs. Within a few short years, the Mustang became one of the fastest-selling vehicles in history and is still produced today. 

• Fiesta (1976) - The first internationally successful model was the Ford Fiesta. In the 1970s, the oil crisis led to a demand for fuel-efficient cars. Car manufacturers all over Europe began introducing compact model cars including the Fiat 127, Renault 5, and BMC Mini. The company spent $870 million developing the model which was the largest development budget in the company’s history at the time. In the first year of sales, the Fiesta broke the sales record that the 1965 Mustang had set. 
• Escort (1980) - The Ford Escort was originally designed as a small family car in Europe in 1968. It became widely popular especially in the United Kingdom where it was the best-selling car during the 1980s and 1990s. It wasn’t until 1980 that Ford brought the Escort to North America when the company needed a quick replacement for the Ford Pinto. The Pinto had a fuel tank design flaw that led to the death of a few hundred people and created a public relations nightmare for the company.
• Explorer (1990) - In the early 1990s, the Ford Motor Company recognized a growing interest in a new type of passenger vehicle — the Sport Utility Vehicle (SUV). They set out to design their own SUV which became the Ford Explorer. The Explorer became the catalyst for the SUV market and other manufacturers soon followed suit. By the late 1990s, SUV sales exceeded that of regular passenger cars. 

• The Ford Motor Company was able to create many popular vehicle models by paying close attention to what their competitors were doing and what their customers wanted. 
• Ford designed and introduced many variations of its models based on the local tastes and demands of each international market.

Introduction and Acquisition of New Brands

Lincoln motor company.

Lincoln Motor Company was created in 1917 as a luxury car manufacturer. The Ford Motor Company began feeling the pressure of competition from luxury brands like Cadillac and Packard. In September of 1922, Ford purchased the Lincoln Motor Company for $8 million (over $123 million today). Today, Lincoln focuses on a small number of models of luxury full-size sedans and SUVs.

The flagship automobile of Lincoln, the Continental was extremely popular throughout the history of the company. It has been reintroduced and discontinued several times, most recently from 2017 to 2020. 

In 1939, under the direction of Edsel Ford, the Ford Motor Company created the Mercury brand. This was intended to compete with General Motors who produced several mid-priced vehicles including Pontiac, Oldsmobile, and Buick. Mercury was the perfect solution to bridge the gap between the affordable Ford brand and high-end Lincoln cars. 

In 2011, after 82 years of operation, Ford announced the decision to end the production of Mercury vehicles. The company decided to put more focus on the Ford and Lincoln brands. 

The Ford Motor Company has been very successful in many of its ventures. However, the Edsel brand turned out to be a costly disaster. Created in 1956 to help the company gain market share from Chrysler and General Motors, Edsel was hyped as the “car of the future”. Despite millions of dollars poured into fancy marketing campaigns, the final product left much to be desired for the consumer. 

There were numerous complaints about the cars being unattractive and having poor quality craftsmanship. One example was the Teletouch transmission selector, which was a series of buttons placed at the center of the steering wheel to change gears. This odd placement confused drivers and was difficult to operate. In order to move the transmission from park to drive, the operator had to shift from park, to reverse, to neutral, and then drive. The transmission motor also didn’t work well on hills requiring drivers to use the parking brake instead of putting the vehicle in park. 

A scathing article published in a 1958 edition of Popular Mechanics highlighted many of the issues that drivers were reporting including poor welding, power steering failure, a leaking trunk, and a faulty odometer. 

After taking a loss of $250 million ($2.2 billion today), the Ford Motor Company chose to discontinue the brand after only three years in 1959. 

Rivian is an American electric vehicle manufacturer founded in 2009. With the rise of electric vehicles, the Ford Motor Company made a brief investment of $500 million into the brand in 2019. However, due to the COVID-19 pandemic, the company decided to terminate the contract. They have decided to maintain their relationship with Rivian for future potential partnerships, but in the meantime, have shifted those resources to the Lincoln Motors brand. 

• Ford faced many pressures from other automotive companies. They purchased and created new automotive brands like Lincoln and Mercury to give them a wider range of options for their customers.
• Not every new brand was a success. The Edsel brand cost the company millions of dollars and damaged its reputation. 

Innovations Led by The Ford Motor Company

The Ford Motor Company had a hand in creating many new products and innovations throughout its history. In addition to new technologies, Ford also played a part in the creation of new industries and historic events such as the moon landing. The Ford Motor Company created its own scientific laboratory in Dearborn, Michigan in 1951 to perform experiments and research for technology and scientific breakthroughs that could be used both inside and outside the automobile industry. 

In 1932, Ford created the first commercially successful V8 engine. This was a hit as American’s became more interested in automobiles with powerful engines. This engine is still popular today with hot rod enthusiasts. 

Early automobiles had a reputation for being unsafe. Ford recognized this and decided to put a focus on reducing automobile accidents and injuries to help change consumer perception. In 1954, the company began performing crash tests to measure the effectiveness of designs and safety features. Since then, Ford has performed more than 31,000 crash tests around the world. In recent years, Ford has begun using computer-simulated tests in tandem with physical crash tests. This has significantly improved the company’s data and insight on safety testing. 

From 1961 to 1974, Ford owned Philco, a consumer electronics company. Philco was responsible for designing, building, and equipping NASA’s mission control during the Apollo and Gemini space programs. The company also launched a series of communications satellites, many of which still provide data and telecommunications access today. 

In 1970, Ford introduced the three-point, self-adjusting lap, and shoulder seat belts into its vehicles as a standard safety feature. 

• The Ford Motor Company has spent a considerable amount of money on new technology to help it stay competitive. 
• The company wisely chose to focus on developing technology in general and not just the automobile industry. This allowed the company to expand beyond its expertise into industries like aerospace. 

Ford’s Corporate Strategy

The 21st Century has posed many challenges for the Ford Motor Company including the 2008 financial crisis and the COVID-19 pandemic, to name a few. The Ford Motor Company unveiled a new strategic plan at the end of 2020 (called “The Plan”) that will revitalize the company by modernizing how it operates, simplifying processes, and exploring new opportunities for growth. 

Electric vehicles

Ford Motor Company's strategy to embrace electric vehicles (EVs) is a core component of its commitment to achieving carbon neutrality by 2050 and aligns with the Paris Climate Agreement's goals. With an enhanced investment commitment of $22 billion through 2025, Ford is expanding its electric lineup to include not only innovative new models but also electrified versions of its iconic vehicles. This includes the Mustang Mach-E, which combines the marque's legendary performance with electric efficiency, and the F-150 Lightning, an electric iteration of America's best-selling truck, reflecting Ford's ambition to meet diverse consumer needs.

Additionally, the electric Ford Focus represents Ford's foray into the compact car segment with electric power, offering a sustainable, efficient option for city driving and daily commutes. Through these efforts, Ford is actively contributing to the global shift towards sustainable transportation, demonstrating its leadership in the automotive industry's transition to electric mobility.

Sustainability

From a sustainability standpoint, the company wants to tackle an impressive list of environmentally friendly milestones. Its mission is to contribute to 11 of the United Nations’ Sustainable Development Goals (UN SDGs). These goals include moving all manufacturing to renewable energy by the year 2035, replacing all plastic vehicle parts with 100% recycled materials, and eliminating all single-use plastics from its manufacturing process. 

Enhanced safety

The Ford Motor Company is dedicated to making its automobiles safer than ever before. With the development of new safety features and self-driving technology, the company wants to create a world that is free from vehicle accidents and workplace injuries. 

• In 2020, the Ford Motor Company unveiled a new plan to revitalize the company as the world economy comes out of the COVID-19 pandemic. 
• The strategic plan focuses on creating a sustainable line of vehicles through the development of new electric cars, trucks, and vans. 
• The company looks to meet sustainability goals set forth by the United Nations and the Paris Climate Agreement. 
• Ford also wants to place a focus on improving automotive safety.

Ford’s Impact of Racing and Motorsports

The Ford Motor Company has a long history of being a part of racing culture since its beginnings. Even before the company was founded, Henry Ford successfully reached a top speed of 20 miles per hour in his quadricycle. In the years following, Ford also won several races and set speed records with his personally designed Ford 999. 

In 1966, Ford captured the world’s attention when three Ford GT40 MK II’s crossed the finish line at the 24-hour Le Man’s race taking first, second, and third place. Not only did this make Ford the first American car manufacturer to win the title, but they also broke Ferrari’s six-year winning streak. Ford went on to take first place in 1967, 1968, and 1969. 

For over 80 years, Ford has been represented in NASCAR races. The first win came in 1949 when Jim Roper won a race in Charlotte in a Lincoln. The following year Jimmy Florian won the first race in a Ford vehicle at Dayton Speedway in Ohio. Since then, Ford-built cars have won more than 800 NASCAR races, second only to Chevrolet. 

In addition to Le Mans and NASCAR, Ford has drivers participating in many other events and races including Formula 1 and the World Rally races. 

For a car manufacturer, being able to demonstrate your vehicle’s performance on a racetrack helps to signify the brand as a well-engineered machine. The more races won in a Ford brand vehicle, the more notoriety the company receives. Key races like the 1966 win at Le Mans are a great way to capture the attention of car enthusiasts everywhere. 

• The Ford Motor Company has used racing throughout its history to demonstrate the power and quality of Ford vehicles. 
• The investment put into developing race cars like the Ford GT have helped Ford capture historic wins that provide exponentially more value from advertising and positive PR. 

Recovery from the Brink of Financial Ruin

Despite having over 100 years of success, the Ford Motor Company hit a rough patch in 2006 and was in a dismal state. The company was on track to take a loss of $17 billion due to falling sales. This forced plant closures and massive layoffs which resulted in Ford buying out 38,000 unionized workers. The Ford Motor Company needed cash but couldn’t get additional financing due to receiving a “junk” bond status. To remain solvent, the company had to mortgage its assets to raise cash. Share prices had plummeted from an all-time high of about $35 in 1999 to $8 in 2006. 

The CEO at the time was Bill Ford, the great-grandson of Henry Ford. He recognized that the company needed a new leader. In a bold move that shocked the industry, Bill Ford convinced the company board to appoint Alan Mulally as President and CEO of Ford Motor Company. Alan Mulally knew very little about the automotive industry. He began his career as an aerospace engineer at Boeing in 1969. Over his 37 years at Boeing, he rose to the position of president of Boeing Commercial Airplanes (a subsidiary of The Boeing Company). He was known for helping to save Boeing from bankruptcy after financial trouble in the late 90s and early 2000s. Bill Ford felt confident that Alan Mulally could do the same for Ford. 

Mulally quickly identified that there were some underlying issues that were resulting in Ford’s stunted performance including a lack of transparency, bad leadership, and a stagnant product line. He openly admitted to the organization that he didn’t have automotive expertise. This helped to drive a culture of more transparency within the Ford Motor Company. Rather than hiding behind inexperience, challenges, or failures, the team began speaking up when they needed help or additional support. 

Mulally also introduced a new approach to meetings. When arriving at Ford, he quickly realized that there were lots of pointless meetings where many topics and issues were discussed but resulted in no action. The normal Ford meetings were replaced with BPR (Business Plan Review) meetings in which leaders would present their 4-5 top priorities with a green, yellow, or red status. This helped the team quickly identify what areas needed the most attention. 

When Mulally announced his plan to the board of directors, he committed to focusing on four major objectives: 

• Aggressively restructure the organization to operate profitably at the current market demand.
• Accelerate the development of new products based on customer wants and needs. 
• Finance the plan and improve the balance sheet.
• Work together effectively as one team. 

The strategy was extremely successful. Not only was Mulally able to turn the company around, but they also avoided needing the taxpayer bailouts that General Motors and Chrysler needed during the 2007-2008 financial crisis. This was a huge feat and boosted public confidence in the company.

• Ford leadership was able to quickly recognize the need for a new CEO to help redirect the company in 2006 when sales began declining sharply resulting in major losses. 
• Bill Ford, the great-grandson of Henry Ford, convinced the board of directors to hire a man with no experience in the industry, Alan Mulally. He understood that experience leading an organization through tough financial times was more important than technical knowledge.
• Mulally’s success was a result of driving a culture change at Ford Motor Company that increased transparency and eliminated counterproductive attitudes and behavior. 

Final Thoughts and Key Takeaways

The Ford Motor Company is a true innovator in the automotive space. Aside from General Motors, no other car manufacturer has seen the levels of growth that Ford has achieved. Much of the success comes from the brilliant leadership of the Ford family that ran the company for over 50 years. Even through tough times, the company has found ways to grow and adapt. Their dedication to being the best helped make Ford the iconic American brand it is today.

 Recap: growth by the numbers

• The Ford Motor Company thrived under the Ford family leadership for over 50 years. Each Ford president (Henry Ford, Edsel Ford, and Henry Ford II) brought new ideas and perspectives that helped the company adapt to changes in the market and competition.
• One of Henry Ford’s greatest successes was the development and refinement of the moving assembly line process. This significantly increased productivity, improved quality, and decreased production costs.
• Few brands have shaped American culture like Ford. The Ford Motor Company is credited with the creation of the American middle class by offering competitive salaries and reduced working hours.
• Ford has created many ground-breaking and popular models including the Model T, Mustang, F-series pickup truck, and Thunderbird. They have been successful at staying ahead of most market trends and consumer demands.
• The Ford Motor Company has been able to grow by not only developing the Ford brand but also building and acquiring additional brands like Lincoln and Mercury to compete in the luxury and mid-price markets.
• Ford ramped up its international reach quickly between 1917 and 1925. Within a few short years, the company was selling cars on every continent.
• The Ford Motor Company has been an innovator both inside and outside the automotive space. They have been dedicated to many forms of scientific and technological research including automotive safety, aerospace, and clean energy.
• In 2020, the Ford Motor Company announced their new corporate strategy – The Plan. The goal is to revitalize and grow the company as it recovers from the challenges of the 21st century including the 2008 financial crisis and the COVID-19 pandemic. The Plan focuses on converting its vehicle line to electric vehicles, tackling environmental objectives, and focusing on enhancing automotive safety.
• As an automotive manufacturer, Ford has a long history of involvement in racing and motorsports around the world. It’s most famous for its wins at Le Mans in the 1960s and success in the NASCAR series. 

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Ford’s Stakeholders, Sustainability, ESG & CSR Strategy

Ford Motor Company’s corporate social responsibility (CSR) programs and environmental, social, and corporate governance (ESG) strategy respond to the demands and interests of the firm’s stakeholders. The car manufacturer impacts these stakeholder groups through its business activities. These stakeholders are significant because they affect the company through their purchases and sociopolitical pressure. Stakeholder behaviors reflect trends that impact the market, such as the ones outlined in the PESTLE/PESTEL analysis of Ford . As one of the biggest U.S.-based automobile manufacturers, the company addresses the needs of its stakeholders to maintain its industry position. Thus, improving corporate social responsibility efforts helps sustain Ford’s long-term development toward its aim of becoming the global market leader.

Ford’s comprehensive corporate social responsibility (CSR) programs address stakeholders’ interests and optimize the firm’s relations with target customers around the world. These programs establish the automaker’s sustainability and corporate citizenship, which enhance business competitiveness. Corporate citizenship makes the business more desirable and, thus, competitive, and strengthens competencies, such as the ones shown in the SWOT analysis of Ford Motor Company . In this regard, addressing the aspect of business ethics and related CSR/ESG issues helps improve the automotive company’s performance in the international market.

Ford’s Stakeholder Groups & CSR/ESG Initiatives

Ford’s stakeholders are comprehensively addressed through various corporate social responsibility initiatives and programs. The following are Ford’s stakeholders, with customers having the highest priority:

• Customers (Ford’s top-priority stakeholders)
• Communities (least-priority stakeholders)

Customers . Ford’s top-priority stakeholders are its customers. The interests of this stakeholder group are high-quality products and services, especially after-sales services. Customers are significant stakeholders because they directly determine the company’s revenues. Ford’s corporate social responsibility efforts for this stakeholder group are as follows:

• Product innovation for quality, fuel economy, ecological impact, and safety
• Ford Smart Mobility
• Ford Driving Skills for Life program

Ford continues to innovate its products for quality, fuel economy, environment-friendliness, and safety to maximize satisfaction among customers as stakeholders. Majority of the company’s vehicles have five-star ratings from the United States New Car Assessment Program (NCAP). Also, the Ford Smart Mobility program aims to increase mobility and provide autonomous/driverless vehicles. In addition, the Ford Driving Skills for Life free driver education program helps novice drivers develop skills for safe and efficient driving. Thus, the company’s corporate social responsibility programs extend beyond offering vehicles and improve the driving skills of customers as the top stakeholders. These corporate citizenship efforts that benefit customers are designed to satisfy Ford’s corporate mission and corporate vision , which focus on the transportation and mobility needs of customers.

Employees . Ford considers its employees as second-level priority stakeholders. This stakeholder group is interested in career development, high wages, and equal treatment and opportunities. Employees are significant stakeholders because they influence the production and service capacity of the business. For instance, even a small decline in this stakeholder group leads to a proportionate decline in the company’s productivity and performance. To address the interests of employees as stakeholders, Ford has the following corporate social responsibility initiatives:

• Sustainable Workforce
• Product Online Training
• Global Learning and Development
• Global leadership development programs

Ford Motor Company has workplace safety policies to protect this stakeholder group and ensure regulatory compliance. The firm’s Sustainable Workforce initiative aims to optimize employees’ health, efficiency, and productivity. For instance, Ford’s global safety standards prevent workplace injuries. The company also offers online product training to keep this stakeholder group always up-to-date and capable of doing their jobs. In addition, the firm’s corporate social responsibility efforts include the Global Learning and Development program, which offers continuing education through classroom-based and online courses, as well as mentoring and shadowing to maximize performance and satisfaction in the stakeholder group. Moreover, Ford has global leadership and development programs, like (a) the Global Leadership Summit for executives and general managers, (b) the Global Executive Leadership Program for directors and senior managers, (c) the Experienced Leader Program for middle managers, and (d) the Salaried Supervisor Institute/Program (SSI) for new or experienced leaders. These programs reflect Ford’s corporate social responsibility and the company’s dedication and support for the interests of the stakeholder group of employees. Ford’s organizational structure (corporate structure) is designed to facilitate these ESG/CSR initiatives for workers. Also, corporate citizenship endeavors are integrated into the social aspect of the automotive business organization. For example, Ford’s organizational culture (work culture) helps enhance employees’ job satisfaction and drive for career development.

Investors . Ford’s investors are interested in maximum profits and business stability. These stakeholders are significant because they affect the firm’s capital. To address the interests of this stakeholder group, the automaker implemented the One Ford plan in 2008 under former CEO Alan Mulally’s leadership to achieve consistency and synergy in its global organization. The One Ford plan reduces costs and maximizes the company’s profits worldwide. This effort is part of the automotive company’s corporate social responsibility strategy to improve its performance. At present, Ford’s generic competitive strategy and intensive growth strategies satisfy shareholders’ interests for business growth and competitiveness. These strategies help make the company’s corporate citizenship comprehensive by including business objectives for outperforming competitors, like Toyota , Tesla , BMW , and General Motors . These firms impose the competitive challenges identified in the Five Forces analysis of Ford and influence decisions for the company’s CSR/ESG programs for sustainability and stakeholder management.

Communities . Ford has corporate social responsibility programs for communities as stakeholders. The interests of this stakeholder group include support for community development, as well as environmental conservation. Communities are significant stakeholders because they can influence the perceptions of Ford’s customers. These interests are addressed through the following corporate social responsibility programs:

• Supplier sustainability training
• Ford Motor Company Fund and Community Services
• Ford Volunteer Corps

Ford provides sustainability training to its suppliers to improve their sustainability performance, which is linked to environmental impact. Also, the Ford Motor Company Fund and Community Services is the company’s nonprofit organization for a wide variety of philanthropic efforts for this stakeholder group. For example, the firm’s corporate social responsibility efforts provide investments for community irrigation, as well as education programs in rural areas. The Ford Volunteer Corps, composed of the company’s employees, supports community development. Moreover, the Ford Driving Skills for Life program ensures that driving does not create issues with community safety. Thus, the company’s corporate social responsibility activities for these stakeholders are diverse. These corporate citizenship programs are communicated as part of public relations in Ford’s marketing mix (4Ps) to improve the public image of the company and its brands.

Ford’s Corporate Citizenship & CSR/ESG Performance in Addressing Stakeholders’ Interests

Ford has excellent corporate social responsibility performance. The company has numerous programs and strategies to address the interests of its stakeholders. The improvement in the company’s performance following the 2008 reform under the One Ford plan is of note. However, for long-term sustainable and green operations, the company must emphasize product development and cost minimization in its corporate social responsibility efforts. For example, more affordable, more energy-efficient, hybrid or electric vehicles can increase customer satisfaction and add to the company’s business performance, sustainability, and corporate citizenship.

• Fatima, T., & Elbanna, S. (2023). Corporate social responsibility (CSR) implementation: A review and a research agenda towards an integrative framework. Journal of Business Ethics, 183 (1), 105-121.
• Ford Motor Company – Community .
• Ford Motor Company – Environmental, Social, and Governance .
• Ford Motor Company – Form 10-K .
• Ford Motor Company – Sustainability .
• Park, J. G., Park, K., Noh, H., & Kim, Y. G. (2023). Characterization of CSR, ESG, and corporate citizenship through a text mining-based review of literature. Sustainability, 15 (5), 3892.
• U.S. Department of Commerce – International Trade Administration – Automotive Industry .
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The Most Captivating Path to PR-ROI: Making the PR-to-Sales Connection

Introduction to Ford

The most alluring PR-ROI option is quantifying PR’s influence on sales. To illustrate, we examine how Ford Motor Company’s launch of the Ford Mustang Mach-E generated media coverage, awareness and sales.

The Ford Mustang Mach-E was unveiled in November 2019. It is Ford’s first vehicle designed from the ground up as an electric vehicle and marked the first time in 55 years that Ford expanded its Mustang family beyond sports coupes.

It also represented another milestone: customers could reserve their Mach-E on Ford.com. The business put a premium on driving customers to Ford’s website and converting visits into reservations for car orders.

In addition to conversion, it was crucial to protect the Mustang brand with its fans. It was vital for the car’s performance figures, green credentials and innovative technology to appear across targeted earned and social media. Ford’s Insights team–global manager Michael Young and analyst Ben Kocsis– collaborated with the communication team to craft a number of measurable objectives.

Campaign Objectives

Business outcomes included driving demand (online reservations) and attaining an earned media conversion rate of 0.7 percent or higher, via attribution analysis.

Outtakes included delivering high message retention and company recall, particularly among opinion elites and younger audiences as quantified via surveys. In addition, the team wanted to elevate Ford’s reputation as an environmentally responsible company, achieve a top-10 search ranking on  Google Trends and reach record levels of site traffic for a new vehicle’s landing page.

Outputs included generating 1 billion in media reach with more than 30 percent in positive tone; raising industry-average readership among females to 37 percent and delivering strong message penetration in target media.

Strategy and Tactics

The data and insights team provided research-backed recommendations to hit these targets. The insights team focused on two primary areas.

The first, an optimized and targeted media list, included demographic analysis identifying optimal media with the highest penetration among target audiences, media segmentation informing multiple event strategies and social media/ influencer identification, ensuring the media conversation spilled into organic social media.

Organic SEO was utilized to direct consumers to Ford. com, ‘steal’ search share from electric vehicle titans and apply SEO data to select earned media partners with the highest credibility around the electric vehicle conversation. 

Ford’s Data and Insights team utilized analytic tools and research to support communication strategy. Tactics included organic SEO, an optimized media target list and engagement across social media.

The team leveraged SEO to discover the most frequently searched keywords connected to electric vehicles, analyzed opportunities for organic keywords, implemented keywords to increase search visibility, identified earned media outlets with the highest authority in organic search around electric vehicles and analyzed keywords competitors ‘owned’ to assess risk/reward of coopting them.

To best optimize the media target list, the team searched for outlets with highest reach/frequency devoted to electric vehicle topics; analyzed reach potential, particularly factoring differences between reach of homepage vs. automotive/ technology focused subpage; and applied reader demographics with existing audience/customer profiles to ensure that intended Mach-E messages resonated with target audience.

Finally, the team engaged with social media by identifying outlets and headline keywords that drove the highest engagement across social platforms around electric vehicles and added datainformed insights and guidance into recommendations.

PR Drives Results

Business outcomes included driving demand (online reservations) and attaining an earned media conversion rate of 0.7 percent or higher, via attribution analysis.By leveraging data-driven analysis and guidance, the communication team accomplished a number of its results against its objectives. Business outcomes included filling First Edition Mach-E reservations, which is as good as it gets. Additionally, the team saw a conversion rate of .99 percent, besting its target of .7 percent.

The team also saw successful outtakes. For those aware of the Mach-E launch, nearly 70 percent of respondents associated the vehicle with Ford. About 60 percent of respondents reacted positively to the Mach-E launch, chiefly among Gen Z and so-called Opinion Elites. It ranked among top 10 topics in Google Search during launch, and generated 2.5M site visits in first two months.

In terms of outputs, the campaign generated 2 billion in potential media reach after the first week. The intended message penetration reached 72 percent (goal: 70 percent). Beyond the launch, Ford’s data and insights team continues to inform communication strategy for Mach-E.

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Home » Management Case Studies » Case Study: The Magic of Ford

Case Study: The Magic of Ford

In 1903, in a small wagon shop in Dearborn Michigan, a man by the name of Henry Ford started what is today the Ford Motor Company. It started it in 1896 when Henry Ford built his first car. It was only experimental at the time, but less than ten years later in 1908 he introduced a more updated version to the public. This became known as the Ford Model t. Once people realised what a wonderful novelty this was and how it would greatly facilitate their lives, there was a huge demand for them. In order for the company to be able to satisfy this heavy demand, ford introduced the world’s first assembly line for cars. It revolutionised the industry. By 1923 more than half of America’s vehicles were made by Ford. Today, the Ford Motor companies the number two company in its industry as well as the number two industrial corporation in the world. When the average person thinks of the Ford Company, they think of just Ford. This thinking, however, is incorrect. Ford is divided into four major components, automotive, Ford credit, Visteon and Hertz. Ford also produces vehicles under the names of Aston Martin, Ford, jaguar , Lincoln and the Mercury and Volvo brands.

Recently, Ford profits have increased significantly, for the nine months ending 30/09/06; total revenues increased 9% to 127.48 billion dollars. Net income from continuing operations decreased 10% to $4.32 bllion dollars. Results reflect increased vehicle sales offset by higher warranty and costs related to the Firestone recall. Last year’s total sales went up 13% to become 163 billion dollars and profit also rose 10% to become $7.2 billion dollars. As far as Ford Motor Company can remember, this is more than any other car company ever. Ford’s main automotive competitors are General Motors, DaimlerChrysler, Toyota, Honda, Nissan and Volkswagen.

One of the ways that ford has established its spot as the number two company in the automotive market is its focus on customer satisfaction. Ford Motor Company admits that its greatest asset is the trust and confidence earned from its consumers. When people see a Ford trademark, Ford wants them to associate that with a trust mask of certitude, quality, reliability of performance and value. Ford strives to connect with their customers as well as reach them. They try to use relationship marketing, because it is cheaper to keep an old customer rather than to attract new ones. William Clay Ford, Chairman of the the Board for Ford Motor Company says that satisfying customers goes beyond great products and services. People want to do business with companies who care about them and their environment. He realises that the best cars are socially and environmentally responsible. Chief Executive Officer, Jacques A. Nasser states, “ we will be a leader in corporate citizenship if we are a well trusted company that people believe contributes positively to a society and uses its resources to create a more sustainable world .” Jim Vannier, Manager of Ford’s advertising and marketing programs admits “ if you listen to your customer, if you provide the right product at the right time, you’ll get the numbers” . The above quotes make it quite obvious that the top executives of the company all concur that customer satisfaction is of the utmost importance in succeeding. If they keep the customer happy, the customer will tell the others they are satisfied, and more and more people will be wiling to consume their product.

Here and Now

The twentieth century was profoundly affected by the innovations of Henry Ford. The inventions of the automobile gave opportunities to multitudes of people. These opportunities were not just in transportation, but in occupation as well. Today, no matter where a Ford is produced, the consumer knows that they are receiving a high quality product. The reason for this is that the majority of Ford vehicles parts are designed by Ford engineers, manufactured in Ford plants and assembled in Ford product lines. When you purchase a Ford product, you are truly purchasing Ford quality. Ford is the number two manufacturer of automobiles, second only to the General Motors Corporation.

Objective of the Company

The mission of the Ford Motor Company is very basic. Ford sees their customers as one of the most important things; they know their customer satisfaction also plays a gigantic role in their success. “[their] mission is to improve continually [their] products and services to meet [their] consumer’s needs, allowing [them] to prosper as a business and to provide a reasonable return for [their] stockholders, the owners of the business. Their mission shows their devotion to constantly improve and while improving, accommodate their customer’s needs. Ford’s five main principals include, 1) Quality: they put the quality of their products first and foremost. Without a quality product, people have no desire to waste their money or jeopardise their safety. 2 ) Customer Care : of you don’t take care of the Customer, someone else will. 3) Constant Improvement : if the Ford Motor Company allowed themselves to remain stagnant in their environment, their competition would eventually have a huge advantage over them, because they would have newer and better product lines to offer. 4) Employee Involvement : Ford wants each and every employee to be involved in their company. The happier the employee, the better they work. It is all about feeling that they are a part of the Ford team. They also want their employee to think like a consumer, they can cater more to the needs of their actual consumers because they will know what the consumers want. 5) They consider dealers and suppliers to be their partners : without the dealers and suppliers Ford would not be able to manufacture the things they need alone and therefore would not be able to produce as many vehicles as there would be a demand for or even be able to distribute them all to people.

Ford has many competitors. Since Ford is ranked the number two companies, its main competitor is quite obviously the number one company, General Motors Corporation. General Motors, also an American Company holds 29.4% of the automotive market share while following close behind them the Ford Motor Corporation holds 25.1% of the top 5 best selling cars in 1999, Ford Taurus appears as number three and Ford Escort appears as number five in a recent survey. The automotive industry has fierce rivalry among its competitors. In the past years the following mergers have occurred- Daimler Benz acquired Chrysler and Ford bought Volvo in order to be able to properly compete with General Motors, this way Ford is not allowing General Motors to become too much larger than they already are. If General Motors develops a new feature or automobile, Ford must be right behind them with their most innovative invention, and vice-versa.

A car, if not properly assembled, maintained, and operated can become a deadly weapon. The United States government regulates many aspects of the auto motive industry. Among these regulations are seatbelts, airbags and shatter proof windshields. The government has also made inspection and maintenance programs more expanded, in order to include more areas and allow for more stringent tests. In 1990 the government amended the Clean Air Act. The main focus of the act was to cut down on all the urban smog, carbon monoxide and particular emissions from Diesel engines and to help decrease acid rain and toxins that motor vehicles contribute to. The amended act demands that polluted cities must sell improved gasoline that helps to reduce ozone forming Hydrocarbons and Carbon Monoxide. Once inside an automobile, the operator of the vehicle is responsible for obeying many regulations as well. It has become extremely important, for instance, to wear your sea belt. Primary enforcement eat belt laws allow police to stop and ticket a driver for not wearing a seat belt, just like any other traffic violation. Seventeen states and the District of Columbia have enacted these laws. The remaining 32 states have secondary laws that allow law enforcement to ticket a driver for not belting up only after the person has been stopped, or ticketed, for another violation, and one state does not have any seat belt law. Obviously, safety best laws work, and the public overwhelmingly supports them. Three out of four Americans supports safety belt laws, according to a recent public opinion survey. Stronger safety belt and child passenger safety laws, and stepped up enforcement of those laws, are the most effective steps we can take to save lives.

Corporate Responsibility Towards Society

Ford Motor Company sponsors many programs to better the community and their safety. For example in the Detroit area, ford organised a weekend clinic in which the automotive safety office educated fifty-five people and their children on the proper use and installation of child safety seats. They demonstrated this in the consumer’s actual vehicles. Ford is also committed to environment cleanliness. They sponsor programs to educate our children on environmental cleanliness and responsibility. They also sponsor company-wide recycling, cleaner operating vehicles, recyclable components, cleaner manufacturing, and employee involvement in environmental activities. Ford do not do these things because they have to, they do it because it is the right thing to do. The Ford Motor Company not only is social active, but culturally as well. Ford provides financial support at many historically black colleges such as Tuskegee University in Albama, this is where the famous black inventor George Washington Carver performed many of his experiments. Ford Motor Company, as of 1999 has 23.2 percent of its employees as minorities. This is up 1% from 1998. Diversity makes the business world go round and no one knows this better than the Ford Motor Company.

Innovation or Death

Product targeting.

Ford motor company has different types of cars, which are each targeted towards many different markets of people. As the company learned the hard way with the Edsel, the importance of a target market is extremely high. Loss of a target marketing focus usually means loss in sales. Ford has a different car targeted towards different age groups, personalities, genders and economic standing and more. The ford Mustang, for example, is targeted mainly at the middle aged. This is exhibited by its slogan of it is what it was and more. This implies that the target consumer would be old enough to remember what the mustang was when it first came out in the 1960’s.

Another example is ford trucks. Their slogan is “Built Ford Tough ”. The toughness implies a target towards rugged men. Because of the fact that the word “tough” is used, it seems that it would be very unlikely that the ford motor company would be using that to attract women. When the word tough is thought of, women are generally not the first thing that comes to mind. The third and final example is the ford Taurus. Its slogan is “ford makes it smart to buy American.” The target market for a ford Taurus is a family. The Taurus station wagon for instance is a great family car with tons of room, yet it handles like a sports car. The above three examples are only a small sampling of what ford offers. Ford motor company manufactures sedans, SUVs, trucks, luxury cars and more. If you are looking for it, the odds are that ford will satisfy you.

Product Mix

Services offered.

When you own a Ford vehicle, you can register for Owner’s Services. This includes reminders of when your vehicle needs to be services, tips for vehicle safety, maintenance information, does it yourself pointers and online manuals. It also includes warranty guides, offers and discounts exclusive to people registered for the service, online shopping, private communications, and links to Ford Company Specialists. Ford, Lincoln, and mercury dealerships specialize in the servicing of their own vehicles. The dealership is a wonderful place to go to have your breaks served, shocks replaced and batteries as well. The company also offers Extended Service Plans(ESP). With the extended Warranty Plan and the factory unlimited Warranty; you are able to choose a plan that suits your needs. The way the plan works is, you pay a small deductible anywhere from $0-$100. The ford ESP cost protects the consumer from increasing prices in labor and increased prices in parts. Other services that are offered by Ford Motor Company area Customer Assistance Centres, Collision Assistance, Roadside Assistance, Technical Service Information and their website. The web site includes links to safety tips and Frequently Asked Questions.

Promotional Strategies

The current promotions that are offered by the Ford Motor Company are Radiator Service, Brake service, and Batteries. All of the above promotions are wonderful for the upcoming winter months. The radiator service includes, top of all fluids and a free 12pt all weather check of hoses, clamps, belt and more. This promotion and all of the above promotions appeal to people who are thinking ahead to cold winter months. This winter in New York has been predicted to be one of the worst we have seen in a while. A radiator is not actually something you would want to break down in the middle of a snowstorm. The battery promotion is offering a Motorcraft tested, though series battery. They are also offering a Silver Series Battery for only$20 dollars more. Each promotion for a new battery comes with over an 83-month warranty. It is a good idea to replace your battery before a new winter season. When it is freezing outside, trying to find a Good Samaritan who is willing to give you a jump is a rarity. The Brake Promotion comes with the Motorcraft brake service. This promotion includes replacement of brake pads or shoes, front or rear turn rotators and drums. This promotion will also check the brake’s hydraulic system and repair, if necessary. This once again appeals to the person(s) who is preparing for the harsh winter to come. Being that, a bad winter generally means a lot of snow and ice. With weather conditions like that, who needs to worry about brake failure?

Pricing Strategies

The municipal financing is so convenient that it can be calculate on the internet. All that needs to be done in order to do this is, select a vehicle, model, make, and product line. The online calculator will give the consumer an estimated lease and retail payment. Ford financing company provides a verity of products and services to both, the dealers and the consumers. Ford credit also has a commercial lending operation, which caters to light truck fleets and heavy trucks. Ford wants to make it as easy as possible for consumer to be able to drive a ford. There are so many different financing options that are offered, that finding a plan that is right for you has become easier than ever. If buying a new vehicle is not financially possible, then ford also offers a whole line of pre-owned vehicles, which are backed by Ford Motor Company with a 100 point inspection.

Distribution Internet Marketing

Ford’s newest web site for ford division cars and trucks is www.fordvehicles.com . the new web site allows perspective customer to compare ford vehicles to other cars made by other manufacturers. They are the first company to give consumers the option of product comparison. The section of product comparison on the web site comes complete with photographs, feature description, safety options, competitive pricing, financing and warranty information. Ford division internet coordinator, Trisha Habucke states , “With our new design we incorporated new technologies that deliver more visually exciting content.” The web site is so user friendly that consumers can just go right from one ford vehicle to the next with out any trouble. Ford is committed to brining their customers total brand experience.

Erin later became the first internet customer satisfaction coordinator. In addition, Hughes started the first internet club for ford dealers. Since the position of internet coordinator so now more common at ford motor companies, once per month all of the internets coordinators get together to share their most recent e-commerce news and best practices. Hughes says “ my job is to provide our dealers with the resources and technology needed to help them sell more vehicles on Main Street and E-street ”. Advertising also plays a large role in the distribution of ford motor company’s products. Ford advertises on television quite often and also on the radio. Previous slogans that ford had etched in everyone’s minds include things like “ Have you Driven a Ford Lately?” with a catchy little tune along with it. Ford also has their slogans and products photographs on major highway billboards a cross the county as well as scoreboards at sporting events such as during commercial breaks where the broadcaster will say something along the lines of sponsored by Ford Motor Company.

The ford motor company has come a very long way, since Henry Ford first established it. They went from a little wagon shop to the second leader in automotive sales. They have been around for almost a century. Ford has elaborative marketing strategies as well as distribution strategies . Their web site was extremely easy and fun to use. Ford is also a very well rounded company in that they are very environmentally concerned. It is nice to see that people realized, if we don’t save our planet now there will be nothing left for future generations. With Ford’s experience and high understanding of, and ambition for the satisfaction of the customer, can they some day be the number one automobile company, beating out the General Motor Corporation?

Q2. Interpolate from the case the clout that the company has in the world economy.

Q3. Assess from the consumer’s perspective the performance of the company’s product.

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Case study: How Ford promotes a culture of compliance and ethics across its operations

Operating in over 100 countries and employing 201,287 people in 71 facilities across the globe, Ford tries to gain the trust of key stakeholder groups by operating responsibly and transparently     Tweet This! , with compliance and ethics as a solid foundation for the company’s business practices and activities.

This case study is based on the 2016/17 Sustainability Report by Ford  that can be found at this link . Through all case studies we aim to demonstrate what CSR/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Making sure ethical business practices are implemented across the company’s operations worldwide is a key priority for Ford, in trying to be a good corporate citizen. In order to promote a culture of compliance and ethics across its operations Ford took action to:

• provide ethics advice
• offer ethics and compliance training
• encourage the reporting of violations
• fight bribery and corruption

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With this case study you will see:

• Which are the most important impacts (material issues) Ford has identified;
• How Ford proceeded with stakeholder engagement , and
• What actions were taken by Ford to promote a culture of compliance and ethics across its operations

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What are the material issues the company has identified?

In its 2016/17 Sustainability Report Ford identified a range of material issues, such as product carbon footprint and fuel economy, customer satisfaction, product quality and safety, supply chain management, assessment, capacity building and performance, government regulation and policy. Among these, promoting a culture of compliance and ethics across its operations stands out as a key material issue for Ford.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Ford engages with:   

How stakeholder engagement was made to identify material issues

To prioritize material topics and identify key challenges and opportunities, Ford conducted interviews with both internal and external stakeholders, who were additionlly asked to rate issues according to importance.

What actions were taken by Ford to promote a culture of compliance and ethics across its operations?

In its 2016/17 Sustainability Report Ford reports that it took the following actions for promoting a culture of compliance and ethics across its operations:

• Providing ethics advice
• Ford’s Corporate Compliance Office has developed various tools to provide employees with key compliance information. These tools include The Right Way, a free mobile application available in seven languages. The Right Way covers topics such as human rights, harassment and discrimination, human trafficking, bribery and corruption.
• Offering ethics and compliance training
• Mandatory online training courses are provided by Ford to non-manufacturing employees and other key personally globally. These courses focus on a number of issues, including the protection of personal and company information, bribery and corruption, conflicts of interest, and the company’s ethical culture.
• Encouraging the reporting of violations
• Fighting bribery and corruption
• implements clear bribery and corruption policies, as well as procedures for reporting breaches of law or policy
• strengthened the anti-bribery and anti-corruption components of its Global Terms & Conditions (and of other contracts) for the company’s suppliers
• provides training to individuals who may come across bribery or corruption issues at work
• assesses all operations for bribery and corruption risks

Which GRI Standards have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 102-16 Values, principles, standards, and norms of behavior

2) Disclosure 102-17 Mechanisms for advice and concerns about ethics

3) Disclosure 205-2 Communication and training about anti-corruption policies and procedures

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism .

7 GRI sustainability disclosures get you started

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References:

1) This case study is based on published information by Ford, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original at the link:

http://corporate.ford.com/content/dam/corporate/en/company/2016-17-sustainability-report/Sustainability-Report-16-17.pdf

2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalre porting.org/standards/gri-standards-download-center/

Note to Ford: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us .

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Digital Transformation Case Studies: 3 Successful Brand Examples

Learn how three companies—Walmart, Ford, and Anheuser-Busch InBev—successfully transformed their business through digital initiatives to improve the customer experience.

Originally published on March 30, 2022

3 digital transformation case studies

Overcoming common digital transformation challenges, tips for building a digital transformation strategy, always focus on your customers.

Digital transformation is a process in which a company invests in new digital products and services to position it for growth and competition. A successful digital transformation improves the customer experience and enhances the way a company operates behind the scenes.

During a digital transformation, your business deploys new products and technologies and develops new ways to connect with your customers. Once the investment in digital begins, your business can use feedback and data to identify growth opportunities.

The three case studies below—from Ford, Walmart, and Anheuser-Busch InBev (AB InBev)—show how legendary companies went beyond simply creating an app and truly re-thought how digital transformation efforts supported sustainable growth for the business.

• A digital transformation is a major business transformation that employs technology to meet business goals and fundamentally change how companies operate.
• A digital transformation drives new products and services that improve the customer experience.
• A digital transformation gives you more informative behavioral data and more touchpoints with the customer.
• AB InBev, Walmart, and Ford invested in digital technology to accelerate internal processes and develop new digital products, which gave them valuable data on the customer experience and influenced future business investments.

Here are three examples of digital transformation. These leading companies carefully considered how new technology could generate data that made internal processes more efficient and produced insights about how to grow customer value.

Brewing company AB InBev underwent a digital transformation while compiling its network of independent breweries into a unified powerhouse . One of the team’s priorities was moving all their data to the cloud . By doing so, AB InBev enabled all employees to quickly and easily pull global insights and use them to make data-backed decisions.

For example, more accurate demand forecasting means AB InBev teams can match supply with demand, which is essential for such a large company with a complex supply chain. Access to big data from all the breweries means employees can experiment faster and roll out changes that improve business processes.

Gathering more data and opening up that data to internal teams was just the first step of the process, though. AB InBev capitalized on its digital investments by launching an e-commerce marketplace called BEES for its SMB customers—the “mom-and-pop shops”—to order products from. With the BEES platform, AB InBev found that their small and medium-sized businesses browsed the store on the mobile app and added items to their cart throughout the day. However, they only made the final purchases later in the evening.

Based on this behavioral data, the BEES team started sending push notifications after 6:00 p.m. recommending relevant products, which led to increased sales and greater customer satisfaction. Through these efforts, BEES gained over 1.8 million monthly active users and captured over $7.5B in Gross Merchandise Volume.

By closely monitoring metrics such as user engagement and purchasing patterns on the BEES platform, AB InBev has made a big impact with its marketing strategies and improved customer retention.

Jason Lambert, SVP of product at BEES, credits their success with the hard data that told them how their customers behaved and what they needed: “It turned out to be a thousand times better than any of our previous strategies or assumptions.” BEES used behavioral analytics to respond quickly, changing the buying experience to match the needs and habits of their retailers.

As a traditional brick-and-mortar retailer, Walmart began a digital transformation by opening an online marketplace. However, digital transformation is an ongoing process—it doesn’t end at the first website. A digital transformation means companies refocus their operations around digital technology. This usually happens both internally and in a customer-facing way.

To drive more customer value through digital touchpoints, Walmart set up mobile apps and a website to enable customers to purchase goods online. After analyzing customer behavioral information from its app, Walmart added more services such as same-day pickup, mobile ordering, and “buy now, pay later.”

These changes were made to meet customer expectations and improve the customer experience. Walmart’s introduction of a seamless online shopping experience represents a pivotal step in digital innovation, setting new standards for retail convenience and efficiency.

In 2024, Walmart announced an AI-powered logistics product called Route Optimization. This product uses AI to find the most straightforward driving routes, pack trailers efficiently, and reduce miles traveled. In addition to using this product internally, Walmart plans to offer it to other businesses that need to employ more efficient supply chain and logistic processes.

Aside from improving customer experience and logistics, Walmart’s head of mobile marketing , Sherry Thomas-Zon, also notes the importance of data—and access to data—in digital transformations. “Our marketing and product teams are always looking at numbers,” Thomas-Zon said. “It keeps our teams agile despite our size and the increasing amount of data we collect and analyze.”

Ford has embraced several digital transformation initiatives, including using technology to transform and improve manufacturing at one of its biggest automotive factories.

Not having the correct parts available holds up workers and slows down the production process. Ford introduced a material flow wireless parts system so they could track the quantities of different parts and make sure there were enough available. Ford’s use of automation has significantly improved its inventory management process by reducing manual tasks and enhancing worker efficiency.

In 2016, Ford also introduced a digital product for its customers: the FordPass app . It enables Ford owners to control their vehicles remotely. For example, drivers can check their battery or fuel levels and lock or unlock their cars from their phones.

In 2024, Ford took its digital transformation even further when it launched the Ford and Lincoln Digital Experience . Key features include personalized vehicle settings, real-time traffic updates, and seamless integration with smart home devices. The platform also provides advanced navigation, remote control of vehicle functions via the FordPass app, and in-depth vehicle health monitoring.

To capitalize on these digital touchpoints, Ford uses data from its app to improve user experiences . With the ability to capture and analyze data in real-time, Ford’s leadership can now make quicker, more informed decisions that directly enhance operational efficiency and customer satisfaction.

Ford’s success is grounded in the same process as Walmart and AB InBev. They used their digital transformation to gather detailed information about how customers interact with their products. Then, they made data-driven decisions to provide more value.

It’s not called a transformation for no reason. You’re changing the way your business operates, which is no easy feat. Planning and effective change management strategies are key to overcoming digital transformation challenges.

Create a digital transformation strategy roadmap that outlines your integration strategy and details how this will affect your teams, processes, and workflows. Once you’ve created your plan, share it with the entire company so everyone can use it as a single reference point. Use a project management tool that enables team members to get a big-picture overview and see granular details like the tasks they’re responsible for.

It takes time for teams to onboard and move away from what was successful under the previous system, for example, shifting from heavyweight to lightweight project planning. Make sure you factor some breathing space into your roadmap—giving everyone a chance to get used to the new way of operating.

As part of a digital transformation, you’ll want your team to develop new skills as well. Upskill your team by incorporating digital skills into your employee development plans . Provide people with opportunities to learn and then track their progress. Promote platforms like LinkedIn Learning to help your teams understand the nuances of digital transformation and boost their skills.

If you believe there’s an end-state to digital transformation, more challenges will arise. New technology and consumer behaviors are always emerging, meaning digital transformation is ongoing. It’s not something you’ll complete in a week. Rather, it’s a continuous state of experimentation and improvement.

At Amplitude, we refer to this process as digital optimization . If digital transformation brings new products, services, and business models to the fold, then digital optimization is about improving these outputs. Both digital transformation and digital optimization are important—digital transformation signals the start of new investments, and digital optimization compounds them.

Examine how each part of the transformation will affect your customers and your employees. Then, you can be intentional and introduce initiatives that positively impact your business.

Diagnose what you want from a digital transformation first

There are different ways of approaching a digital transformation. Some companies prefer to implement an all-inclusive digital strategy, transforming all parts of their organization at the same time. Others opt for a less risky incremental strategy. Every company is different. To choose the best approach, examine your whole organization and analyze where digital systems could help.

Consider your business goals. Investigate how a digital transformation could impact the customer experience. What new products could you provide? How could you improve your services? For example, you might use artificial intelligence to create a chatbot that reduces customer service wait times—or purchase software that does the same.

You’ll also want to review your business processes. How could a digital transformation speed up your current workflows, improve your operations, or enable more collaboration between teams? Asking these questions lets you challenge the way you operate and will help you identify problems in your organization that you might not have noticed before. For example, perhaps your deliveries are often delayed, and you could make delivery smoother by digitizing elements of your supply chain .

Get cross-team involvement

Though different teams may work separately, your customers are affected by each department. Collaboration elevates everyone’s work because it means people can make informed decisions.

Make sure you get input from all of the right stakeholders when you create your digital transformation strategy. Ask:

• What processes hold you up?
• Where are the bottlenecks?
• What data would be useful for you?

Enable everyone to access the data they need without input from anyone else. Help your employees improve their data literacy . Start by training all your employees to use your organization’s data tools and software. To help everyone in your organization access and analyze data, adopt easy-to-use self-service tools (e.g., an analytics tool and a CRM). Then, lead by example. Provide inspiration by using data storytelling in your presentations to explain the decisions you make.

Encourage collaboration between teams by creating shared resources so they have spaces to present insights and submit suggestions. This could be as simple as creating a Google Doc for brainstorming that multiple teams can access or sharing charts directly within your analytics solution, like with Amplitude Notebooks . Then, you can start to experiment and make improvements to the digital customer experience like Walmart, Ford, and AB InBev did.

Once your digital transformation is moving, a digital optimization strategy is an opportunity to generate growth. Your digital transformation initiatives will continue in parallel, and the process will become a feedback loop:

• Deploy new digital systems and products.
• Analyze the data that comes forth from these investments. Use it to draw insights about your customers or processes.
• Make decisions based on the data and make changes.

Keep customer needs at the heart of your work. Let them guide you as you undergo digital transformation. As you gather more data about how your customers interact with your new digital products, use it to make the experience even better for them. This will lead to more trust and loyalty and, ultimately, more recurring revenue.

To continue your learning about digital transformation and optimization, join an Amplitude workshop or webinar or read our Guide to Digital Optimization .

• MIT Sloan. How to build data literacy in your company
• Ernst & Young. How global supply chain strategy is changing and what comes next
• Datanami. From Big Beer to Big Data: Inside AB InBev’s Digital Transformation
• Predictable Profits. How Ford Embraced Digital Transformation
• APMG International. Heavyweight vs Lightweight Management

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